CapitaLand Ascott Trust (CLAS) is divesting Citadines Mount Sophia Singapore to an unrelated third party for S$148 million (US$110.8 million) – the divestment is expected to be completed in 1Q2024.
The 154-unit property will be divested at 19.4 per cent above book value, with net proceeds expected to be approximately S$138.6 million. The exit yield is about 3.2 per cent and CLAS will recognise a net gain of approximately S$14.6 million.
CLAS is divesting 10 mature assets which will unlock S$38.9 million in gains – the capital will be used to reduce debt, fund its asset enhancement initiatives (AEI) or be redeployed into higher-yielding investments.
Serena Teo, CEO of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management (the managers of CLAS), said: “We are divesting Citadines Mount Sophia Singapore at close to S$1 million per key, which is a significant premium to book value. Including Citadines Mount Sophia Singapore, CLAS has announced divestments of S$408.1 million of assets at a premium to book value in the last eight months.
“Over the past three years, distribution income gained from our investments has more than replaced the distribution income from the properties that were divested. CLAS also has eight properties undergoing or will undergo AEI.”
CLAS has also completed the divestment of Courtyard by Marriott Sydney-North Ryde on January 31. It is one of two mature hotels in CLAS’ divestment pipeline in Australia. Divestment of the other property, Novotel Sydney Parramatta is expected to be completed in 3Q2024.
Post-divestment, CLAS will have four lodging properties in Singapore. CLAS has three operational properties – Ascott Orchard Singapore, lyf one-north Singapore and The Robertson House by The Crest Collection. Currently under development, the 192-unit Somerset serviced residence remains on track for completion in 2H2025.