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SINGAPORE (July 4): Ascott Residence Trust has entered into two conditional agreements to divest its interests in two serviced residence properties in China – Citadines Biyun Shanghai and Citadines Gaoxin Xi’an – for a total consideration of RMB980 million (S$198.0 million or RM615.5 million).
The agreements were entered into through Ascott REIT’s wholly-owned subsidiaries Biyun Investments (Hong Kong) and Gaoxin Investments (Hong Kong).
The subsidiaries will divest their interests in Gain Mark Properties (Shanghai) and Citadines (Xi’an) Property Co., which are the companies holding the properties.
The manager of Ascott REIT says net sale proceeds, estimated to be around RMB 239 million, may be used to pare down the debts of Ascott REIT and its subsidiaries, or fund potential acquisitions and other general corporate purposes.
“Given that growth prospects of both properties are limited due to changes in the operating environment, the sale would be at an opportune time to unlock the underlying value of the properties and re-deploy the proceeds in other higher yielding assets to enhance the returns of Ascott REIT’s portfolio,” the manager of Ascott REIT says in a filing to SGX on Monday.
Units of Ascott REIT closed half a Singapore cent higher at S$1.16 on Monday. — theedgemarkets.com.sg
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