Private investor Cheong Sim Lam, whose family developed International Plaza and the Hyatt Regency Singapore, has acquired Ascott Reit's Ascott Raffles Place Singapore for $353.3 million.
The 20-storey conserved building with 146 serviced apartments is located at 2 Finlayson Green, and has a 999-year lease.
Mr Cheong developed several residential projects such as Robinson Suites in Robinson Road, and previously owned 137 and 139 Cecil Street.
The sale price is 64.3 per cent above the property's latest valuation of $215 million as of Dec 31 last year. After accounting for transaction-related expenses, Ascott Reit is expected to realise an estimated net gain of $134 million.
The net sale proceeds may be used to pare down the debts of Ascott Reit, fund potential acquisitions and/or for other general corporate purposes, the company said in a Singapore Exchange announcement yesterday after market close.
Ascott Raffles Place accounted for 3 per cent of Ascott Reit's gross profit for the nine months ended Sept 30 last year. Its sale is not expected to have a material impact on Ascott Reit's financial performance.
Ms Beh Siew Kim, chief executive officer of Ascott Reit's manager, said in a statement: "The sale will give us the financial flexibility to recycle capital and invest in higher-yielding properties. We may also use the sale proceeds to pay down debt, which will then increase our debt headroom for potential acquisitions of quality assets, or to develop our own properties such as lyf one-north Singapore to enhance Ascott Reit's portfolio."
The sale was brokered by Cushman & Wakefield. Ascott Reit said the transaction is expected to be completed in May.
Ascott Reit's other operational properties in Singapore are Ascott Orchard, Citadines Mount Sophia and Somerset Liang Court. lyf one-north is expected to open in 2021.
Ascott Reit's asset size has grown to $5.3 billion, and its international portfolio comprises 73 properties with 11,430 units in 37 cities across 14 countries in the Americas, Asia-Pacific and Europe as of Sept 30 last year.
Its serviced residences are mostly operated under the Ascott, Citadines and Somerset brands.