CapitaLand Ascott Trust (CLAS)

[kayhian]

Source: http://www.ocbcresearch.com/Article.aspx...1657_19061

Ascott Residence Trust’s (ART) recent 1Q14 results were within our expectations. While portfolio RevPAU has remained stable both YoY and QoQ at S$124, we note that RevPAU for Japan, United Kingdom and Belgium saw a 18%, 13% and 11% increase respectively, driven by strong demand from corporate and leisure travelers. In Singapore and Vietnam, higher demand from executives on project assignments were also seen, and this has helped to push RevPAU up 6% in both countries. Looking ahead, management disclosed that it will continue to undertake AEIs to enhance customer experience and maximize returns. Coupled with the revenue from its Dalian property (acquired in Mar), Fukuoka property (to complete by Jul) and possibly new acquisitions in the key gateway cities, we believe 2H14 to be stronger. Maintain BUY with unchanged fair value of S$1.33 on ART.

[kayhian]

Ascott Residence Trust proposed to acquire shareholding interests in three serviced residence properties (two in China, one in Malaysia) for a purchase consideration of $131.6 million. The serviced residence properties come with a total of 707 apartment units yielding a combined gross floor area of 64,787.1 square metres, and are valued at $175.7 million. When completed, distribution per unit of the trust’s enlarged portfolio is expected to be lifted from $0.084 to $0.0881 in FY13 on a pro forma basis.

[kayhian]

Source: UOB Kayhian

Ascott Residence Trust- Upgrade to BUY.
(ART SP/BUY/S$1.24/Target: S$1.40)
FY14F PE (x): 8.5
FY15F PE (x): 9.2

Ascott Residence Trust (ART) announced the acquisition of three serviced residences in Malaysia (1) and China tier-2 cities (2) from its sponsor The Ascott Limited for a total purchase consideration of S$174m.

Yield-accretive acquisitions done at a slight discount to valuations. The acquisition of three serviced residences is yield-accretive with a blended average pro-forma EBITDA yield of 5.1% and will result in a proforma DPU increase of 1.2% assuming the transaction was done at the beginning of 2013. Management guided that the China properties are still ramping up and expects 2014 EBITDA yields to be better than last year. In terms of valuation, the portfolio is being acquired at a slight 1% discount to the
average of two independent valuations. The overall funding cost for the acquisition is expected to be slighlty lower than 4%.

Upgrade to BUY and increase target price by 7% to S$1.40. The acquisition clears the overhang on the deployment of the funds raised through placement proceeds and offers scope for organic yield improvement. ART is currently trading at an attractive 2015F yield of 7.4% (peers average: 7%). Thus, we upgrade the stock from HOLD to BUY with a target price of S$1.40. Our valuation is based on a two-stage DDM model (required rate of return: 8.1%; terminal growth rate: 2.0%)

[kayhian]

ASCOTT Residence Trust has posted distribution per unit (DPU) of 2.19 Singapore cents for the second quarter ended June 30, down 11 per cent from 2.45 Singapore cents a year ago.

Ascott Residence Trust's (Ascott Reit) revenue for 2Q 2014 increased 14 per cent to S$88.1 million compared to 2Q 2013. This was largely due to contributions of S$9.4 million from new properties acquired in 2013 and 2014, as well as stronger contribution from existing properties. In line with the increase in revenue, gross profit grew 14 per cent to S$46.5 million. Ascott Reit's Unitholders' distribution for 2Q 2014 rose 8 per cent to S$33.5 million. Distribution per unit (DPU) of 2.19 cents for 2Q 2014 is 5 per cent higher than the adjusted DPU of 2.09 cents for 2Q 2013. This accounted for the effects from Ascott Reit's rights issue in December 2013 and excluded one-off items of approximately S$4.0 million.

Mr Lim Jit Poh, Ascott Residence Trust Management Limited's (ARTML) Chairman, said: "In the first quarter, we acquired a quality asset in Fukuoka and in the second quarter, we acquired our first property in Dalian. In July, we entered into conditional agreements to acquire our first serviced residences in Kuala Lumpur, Xi'an and Wuhan1. The acquisitions of these three properties with prime locations are expected to increase our FY 2013 DPU by 1.2 per cent to 8.81 cents on a pro forma basis. It will broaden Ascott Reit's earning base, increase our total asset size to S$4.0 billion and expand our portfolio to nearly 10,000 units. We will continue to grow Ascott Reit's portfolio through accretive acquisitions in China, Japan, Malaysia, Australia and Europe to further enhance Unitholders' returns."

Mr Ronald Tay, ARTML's Chief Executive Officer, said: "Revenue for China surged 60 per cent2 mainly due to the acquisitions of three properties in 2013 and stronger performance from existing properties. Revenue for Japan increased 70 per cent2 mainly due to the acquisitions of 11 rental housing properties in 2013 and Infini Garden in March 2014 as well as stronger demand for our serviced residences from corporate and leisure travellers. Revenue for Spain and Belgium were also up 18 per cent2 and 17 per cent2 respectively as our renovated apartments at Citadines Prestige Ramblas Barcelona and Citadines Toison d'Or Brussels were able to yield higher rental rates."

Mr Tay added: "We will continue to actively refurbish our properties to enhance the experience for our guests and create value from the existing portfolio to maximise returns for Unitholders. We completed the refurbishment of Ascott Raffles Place Singapore in this quarter and the uplift in rental rate for the renovated units was encouraging. We have also started the upgrading of Somerset Ho Chi Minh City and the renovation of several properties in China is ongoing.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...0-20140906

PUBLISHED SEPTEMBER 06, 2014
Ascott's mission: 80,000 serviced apartments by 2020
CEO of CapitaLand outfit outlines plans to more than double current number
BYLEE MEIXIAN
leemx@sph.com.sg @LeeMeixianBT

'While we are actively looking for opportunities, we want to make sure we can acquire assets at a reasonable price...'
- CEO Lee Chee Koon
PHOTO: JAMIE KOH/ THE STRAITS TIMES
Singapore
ASCOTT CEO Lee Chee Koon wants to more than double the group's number of serviced apartments to 80,000 by 2020, and he is banking on this hospitality-residential hybrid's growing favour with travellers.
"If we grow organically, every year we add about 4,000 units. Going just by that, by 2020 we should hit 60,000 ... but I am setting a more ambitious target for the team," Mr Lee told reporters in a recent interview.
This is despite a run-up in real-estate prices in first-tier Chinese cities and London, which has crimped its ability to acquire assets. At the same time, saturation and a lack of deals in the market in Paris and some German cities have also limited acquisition and development opportunities.

[greengiraffe]

Quest’s $500m Singapore deal to drive site rollout
THE AUSTRALIAN OCTOBER 24, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
Paul Constantinou, chairman of Quest Apartments complex at Docklands in Melbourne. Picture: David Geraghty
Quest chairman Paul Constantinou. Quest says the Ascott deal is crucial. Picture: David Geraghty Source: News Limited

SERVICED apartment operator Quest has signed a $500 million development deal with Singapore’s The Ascott Limited that will see the rollout of 20 new properties over the next five years.

The Ascott has also taken a 20 per cent stake in Quest for $28.8m, while its subsidiary ­Ascott Residence Trust has bought three serviced apartment towers from Quest for $83m as part of the transaction.

The deal marks the return of Singapore’s Capitaland, which owns The Ascott and manages the listed Ascott Residence Trust, into Australia following its selldown of its 60 per cent stake in Australand in 2012.

Quest chief executive Zed Sanjana said its search for a property partner to help it grow its business was the reason behind the group’s appointment of Goldman Sachs last year — an appointment that led to speculation the group was considering a float on the Australian Securities Exchange.

“In terms of our aspirations to IPO (initial public offering) we don’t really have any at this stage,” Mr Sanjana said. “If we were going to do it we would have done it by now because it’s not a bad market and would have done well off the back of the Mantra IPO,” he said.

Mr Sanjana said the deal with Ascott would bring in institutional firepower to help the group grow its business in a ­market where demand was brimming but supply of new property was low.

“The challenge for most hotel and service apartment operators is bringing supply to market.

“They’re obviously high capital-intensive properties to put up so it’s important to find a capital partner that can support your aspirations to grow.”

On top of the five new properties that will be developed under The Ascott partnership, Quest will also continue to roll out about eight new properties a year with other partners.

The first stage of the joint ­venture agreement will focus on building Quest’s network of ­serviced apartments in Australia and New Zealand.

Down the track, The Ascott and Quest could take their partnership into new markets including Asia, Mr Sanjana said. Under the partnership, Ascott Residences has purchased Quest’s properties at Mascot Airport, Sydney Olympic Park and Campbelltown.

The developments undertaken by the joint venture partnership will be owned by Ascott Residences and leased to Quest.

Quest, which focuses on the corporate travel market and longer-stay guests, plans to target the NSW, Queensland and Perth markets under its partnership with Ascott.

The Ascott Limited operates 200 serviced apartment and hotel properties under three brands — Ascott, Citadines and Somerset — including five properties in Australia.

“Through our strategic partnership with Quest, we can leverage each other’s knowledge and contacts in Australia to rapidly extend our presence in the growing market for international quality serviced apartments,” The Ascott chief executive Lee Chee Koon said. “We also expect a stronger pipeline of properties in Australia for Ascott to acquire.”

[kayhian]

SINGAPORE — Property developer CapitaLand’s wholly-owned serviced residence offshoot The Ascott Limited is deepening its presence Down Under with a series of moves that include a A$500 million (S$558 million) investment to forge a strategic partnership with a major Australian player, in a bid to tap the growing business travel industry there.

Under the partnership with Quest Serviced Apartments, Ascott said yesterday that it will invest up to the amount over the next five years on acquisitions of new properties that will be leased and operated under Quest’s franchise model. Ascott is also taking a 20 per cent stake in Quest for A$28.8 million with the option to increase the holding to 30 per cent in a move to strengthen its foothold in the business travel segment in Australia, chief executive Lee Chee Koon said yesterday.

“Competition in the travel industry has stiffened with the emergence of players such as Airbnb … They pose a lot of competition to players that capture only the leisure market, but our focus has predominantly been corporate travellers and it’s the same for Quest, so we think that we can combine our global network and that will help us to dominate this particular market segment,” Mr Lee said.

“Ascott and Quest have complementary strengths. For Ascott, a lot of our business comes through international customers to Australia, while Quest’s sales and distribution is more to domestic corporate travellers,” he added.

Quest currently has the largest network of serviced apartments in Australia with 112 properties, most of them located in the state of Victoria. Its chairman Paul Constantinou said the company has opened an average of eight new properties each year and the partnership with Ascott will help to more than double its portfolio to 250 properties in Australia and New Zealand before the end of this decade.

Separately, Ascott Residence Trust, a real estate investment trust 46 per cent owned by Ascott, is buying three properties in Greater Sydney from Quest at A$83 million which will significantly boost its Australian footprint from one property in Perth currently. The accretive acquisitions at an EBITDA (earnings before interest, taxes, depreciation and amortisation) yield of 7.7 per cent are expected to increase the trust’s distribution per unit from 8.4 Singapore cents to 8.46 cents on a pro forma basis.

Following the acquisition, the trust will receive fixed rent by taking over the leases for the three serviced residences — Quest Sydney Olympic Park, Quest Campbelltown and Quest Mascot.

“Fixed rent from the three serviced residences is underpinned by long-term master leases and will enhance the stability of Ascott REIT’s income … Demand is anticipated to grow due to the urban development plans earmarked at each of the locations,” said Mr Ronald Tay, chief executive of Ascott Residence Trust Management, the manager of the REIT.

Mr Lee said the announcements affirm Ascott’s confidence in Australia’s serviced residence segment, despite parent company CapitaLand’s exit from the market by divesting its stake in developer Australand in March.

“The Australian accommodation sector continues to expand with more than 100 properties expected to be opened over the next few years. Foreign investment in the sector has been on the rise in recent years due to the reliable legislative environment, resilient economy and stable returns in Australia,” he said.

[greengiraffe]

They are armed with too much of Ah Gong $... I cannot trust mgt that keeps backflipping... anyway, hospitality sector is a tougher sector than ALZ's development and investment prop division...

Odd Lots Vested
GG

Mr Lee said the announcements affirm Ascott’s confidence in Australia’s serviced residence segment, despite parent company CapitaLand’s exit from the market by divesting its stake in developer Australand in March.

SINGAPORE — Property developer CapitaLand’s wholly-owned serviced residence offshoot The Ascott Limited is deepening its presence Down Under with a series of moves that include a A$500 million (S$558 million) investment to forge a strategic partnership with a major Australian player, in a bid to tap the growing business travel industry there.

Under the partnership with Quest Serviced Apartments, Ascott said yesterday that it will invest up to the amount over the next five years on acquisitions of new properties that will be leased and operated under Quest’s franchise model. Ascott is also taking a 20 per cent stake in Quest for A$28.8 million with the option to increase the holding to 30 per cent in a move to strengthen its foothold in the business travel segment in Australia, chief executive Lee Chee Koon said yesterday.

“Competition in the travel industry has stiffened with the emergence of players such as Airbnb … They pose a lot of competition to players that capture only the leisure market, but our focus has predominantly been corporate travellers and it’s the same for Quest, so we think that we can combine our global network and that will help us to dominate this particular market segment,” Mr Lee said.

“Ascott and Quest have complementary strengths. For Ascott, a lot of our business comes through international customers to Australia, while Quest’s sales and distribution is more to domestic corporate travellers,” he added.

Quest currently has the largest network of serviced apartments in Australia with 112 properties, most of them located in the state of Victoria. Its chairman Paul Constantinou said the company has opened an average of eight new properties each year and the partnership with Ascott will help to more than double its portfolio to 250 properties in Australia and New Zealand before the end of this decade.

Separately, Ascott Residence Trust, a real estate investment trust 46 per cent owned by Ascott, is buying three properties in Greater Sydney from Quest at A$83 million which will significantly boost its Australian footprint from one property in Perth currently. The accretive acquisitions at an EBITDA (earnings before interest, taxes, depreciation and amortisation) yield of 7.7 per cent are expected to increase the trust’s distribution per unit from 8.4 Singapore cents to 8.46 cents on a pro forma basis.

Following the acquisition, the trust will receive fixed rent by taking over the leases for the three serviced residences — Quest Sydney Olympic Park, Quest Campbelltown and Quest Mascot.

“Fixed rent from the three serviced residences is underpinned by long-term master leases and will enhance the stability of Ascott REIT’s income … Demand is anticipated to grow due to the urban development plans earmarked at each of the locations,” said Mr Ronald Tay, chief executive of Ascott Residence Trust Management, the manager of the REIT.

Mr Lee said the announcements affirm Ascott’s confidence in Australia’s serviced residence segment, despite parent company CapitaLand’s exit from the market by divesting its stake in developer Australand in March.

“The Australian accommodation sector continues to expand with more than 100 properties expected to be opened over the next few years. Foreign investment in the sector has been on the rise in recent years due to the reliable legislative environment, resilient economy and stable returns in Australia,” he said.

[thor666]

Heard from the wind: Capitaland and ascott are not so integrated or culturally aligned internally.

(vested in Ascott)

Sent from my D5503 using Tapatalk

[kayhian]

Ascott Residence Trust’s top line grew 8.9 percent to $93.7 million in the three-month period ended 30 September, driven by acquisitions in Japan and China as well as stronger demand from corporate and leisure sectors in the UK. Subsequently, amount distributable to unitholders grew 7.8 percent to $32.3 million and the trust declared a distribution per unit of $0.0211. For the nine months, turnover and amount distributable to unitholders expanded 12.7 percent and 4.5 percent to $262.2 million and $92.5 million respectively.