Ascott Sells Scotts Shopping Centre And The Ascott Singapore Serviced Residence For S$345 Million
The Ascott Group has entered into a conditional agreement to sell its Scotts Shopping Centre and The Ascott Singapore serviced residence at Scotts Road for S$345 million. The company expects to recognise an estimated net gain of S$29.5 million from the sale.
The buyer is publicly-listed developer Marco Polo Developments. Legal completion of the transaction is scheduled to take place three months after the date of the sale agreement.
The prime five-storey retail mall and 153-unit serviced residence above the mall occupy a 6,609 sqm freehold site in Singapore’s premier Orchard Road shopping belt.
Ascott is a leading international serviced residence company with 13,800 serviced residence units in 39 cities in Europe and Asia Pacific. It is the serviced residence arm of CapitaLand Limited, one of Asia’s largest listed property companies.
Mr Liew Mun Leong, Ascott’s deputy chairman, and president and CEO of its parent company CapitaLand Limited, said: “With the sale of the property, Ascott is on track in its strategy to divest its non-core assets by 2005. It will continue to manage the divested serviced residence until end 2006.
“With this strategic divestment, and Ascott’s acquisition last week to fully own the Citadines serviced residence chain in Europe, the group has made great strides to sharpen its focus on its core serviced residence business, escalate its operations to a solid global business platform, and entrench its position as a market leader in Asia Pacific and Europe.”
Ascott’s chief executive officer, Mr Eugene Lai, said: “We will use the sale proceeds to reduce debt and fund growth. We plan to expand in markets such as China, Japan, South Korea, Thailand, India and Europe, and seek improved returns through a mix of management contracts and equity participation.”
Mr Lai added that in line with Ascott’s goal to be the leading serviced residence company worldwide, it recently formed a marketing alliance with the serviced residence arm of Equity Residential, the largest publicly-traded apartment company in the US, to provide serviced apartments throughout the US.
Last week, Ascott acquired the remaining 50 per cent interest in the Citadines chain for Euro 74.3 million (S$154.2 million). Citadines operates over 5,100 serviced apartments in major European cities such as Paris, London, Brussels, Barcelona and Berlin.
Ascott said that by acquiring the remaining stake, it will be able to fully integrate the European chain with the rest of its operations to achieve greater economies of scale. It will also be able to leverage a combined larger customer base to cross-sell and accelerate sales growth. The group expects Citadines to contribute significantly to its profitability.
Scotts Shopping Centre has a net lettable area of 8,632 sqm. The 23-storey The Ascott Singapore comprises luxury studio to split-level penthouses with broadband Internet access. Facilities include a gym, swimming pool, residents’ lounge and business centre.
For the current financial year ending Dec 31, 2004, the estimated divestment gain is expected to increase Ascott’s earnings per share by 1.92 Singapore cents. However, it will not have a material impact on the group’s net tangible assets per share.
About The Ascott Group
The Ascott Group is a leading international serviced residence company with 13,800 serviced residence units in the key cities of Europe and Asia Pacific.
Ascott's global presence spans 39 cities in 16 countries. These include London, Paris, Brussels, Berlin and Barcelona in Europe; Singapore, Bangkok, Hanoi, Kuala Lumpur, Tokyo, Shanghai and Beijing in Asia; Sydney, Melbourne and Auckland in Australia and New Zealand; and Dubai in the Gulf region.
Through its marketing alliance with Equity Corporate Housing, the group also offers upper-tier serviced apartments throughout the US.
Headquartered in Singapore, The Ascott Group pioneered Asia Pacific’s first branded luxury serviced residence in 1984. Today, it boasts a 20-year industry track record and serviced residence brands that enjoy recognition worldwide.
The group’s flagship The Ascott luxury serviced residence brand projects an elegant lifestyle appealing to top executives. Its Somerset upper-tier brand offers stylish, contemporary living for senior to upper management executives. The mid-tier Oakford brand in Australia and Citadines brand in Europe provide corporate executives with
Recent awards the group has clinched include the Number One position in the 2004 China’s Top 100 Serviced Residences ranking for its eight properties in China, 2004 Best Service in Serviced Apartments awards in Hanoi and Ho Chi Minh City, and Best Annual Report and Best Operating and Financial Review awards at Singapore’s 2004 Annual Report Awards.
Listed on the mainboard of the Singapore Exchange, Ascott is the serviced residence arm of CapitaLand Limited, one of Asia’s largest listed property companies. Headquartered in Singapore, CapitaLand’s core businesses in property, hospitality, property services and real estate financial services are focused in gateway cities in Asia, Australia and Europe. The company's hospitality businesses in hotels and serviced residences span more than 60 cities around the world.
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