Ascott REIT to acquire three accretive assets in Malaysia, China for S$173.9m

SINGAPORE: Ascott Residence Trust (Ascott REIT) has entered into conditional agreements to acquire its first serviced residence in Kuala Lumpur as well as Wuhan and Xi’an in China. The total property value of the acquisition is S$173.9 million (RM445 million).

Ascott REIT will acquire the 207-unit Somerset Ampang Kuala Lumpur from The Ascott Ltd (Ascott) for RM175 million.

It will also acquire the 249-unit Citadines Zhuankou Wuhan and the 251-unit Citadines Gaoxin Xi’an for 252 million yuan (RM129 million) and 270 million yuan, respectively, from Ascott Serviced Residence (China) Fund.

The three serviced residences will continue to be managed by Ascott.

Commenting on the acquisition, Ascott Residence Trust Management Ltd (ARTML) chairman Lim Jit Poh said it was their first acquisition of a serviced residence in Malaysia, which has a stable and growing economy.

“The acquisition of the two properties in Wuhan and Xi’an will further expand our presence in China. Many multinational corporations have established offices in Malaysia, increasing foreign direct investment by 25%, year-on-year, to a record RM38.8 billion in 2013.

“This trend is expected to gain momentum given the government’s pro-business policies to make Malaysia a business and investment-friendly destination.

“Demand for serviced residences in China remains strong due to the continual influx of multinational companies and increasing domestic and international business travel,” Lim said in a statement.

ARTML chief executive officer Ronald Tay said Kuala Lumpur is a key commercial centre and a gateway to Malaysia for international travellers.

“The government is positioning the city as a leading destination in Asia for meetings, conferences and exhibitions having secured many international events.

“Kuala Lumpur’s modern infrastructure, quality facilities and competitive business costs will continue to attract multinational companies to set up businesses in the city and drive demand from expatriates and travellers for serviced residences,” he said.

Ascott REIT will have close to 10,000 apartment units after the acquisition of the three high-quality assets which will expand Ascott REIT’s asset size to S$4 billion.  — Bernama

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