Ascott Residence Trust (Ascott REIT) is acquiring a prime hotel near Times Square in Manhattan for S$146.6 million (US$106 million). The trust’s key-count will increase to over a thousand rooms spread across three properties in New York, with the acquisition of the 224-room DoubleTree by Hilton Hotel New York. Financed by a mixture of debt and perpetual securities, once the hotel is transacted, the United States will become the trust’s fourth-biggest market after Singapore, Japan and China which are its key markets in Asia. The acquisition of the hotel has an EBITDA (earnings before interest, tax, depreciation and amortisation) yield of 6 per cent, which is expected to increase Ascott REIT's pro forma distribution income in the 2016 fiscal year by almost US$1 million. The improvement will lead to an increase in distribution per unit from S$7.23 cents to about S$7.29 cents on a pro forma basis. The REIT will continue to pursue assets in key gateway cities in the US, Europe, Australia and Japan.
HVS APAC HOSPITALITY NEWSLETTER.