SINGAPORE, 30 July 2020: Ascott Residence Trust has entered into two conditional agreements to divest Ascott Guangzhou in China and Citadines Didot Montparnasse Paris in France to two unrelated third parties.
The total sale value is SGD191.4 million, while ART is expected to realise an estimated net gain of about SGD23.2 million upon the completion of both transactions.
For Ascott Guangzhou in China, the divestment price of RMB780 million (SGD155 million) is about 52% above the property’s book value and about 81.0% higher than the acquisition price in 2012. ART is expected to realise estimated net gains of about SGD19.4 million upon the completion of the transaction in 1Q 2021.
For Citadines Didot Montparnasse Paris in France, the divestment price of EUR23.6 million (SGD36.4 million) is about 69% above the property’s book value and about 60.4% higher than the acquisition price in 2010. ART is expected to realise estimated net gains of about SGD3.8 million upon completion of the transaction in 4Q 2020.
Managers of ART chief executive officer Beh Siew Kim said: “Despite the Covid-19 situation, the opportunistic sale of Ascott Guangzhou and Citadines Didot Montparnasse Paris at an attractive price allows ART to rejuvenate its portfolio and unlock the strong underlying value of these properties… The proceeds may also be used to pare down ART’s debt and reduce its gearing, as distribution to stapled security holders, or for general corporate purposes.”
Meanwhile, Ascott Residence Trust reported a distributable income of SGD32.6 million during the first half of 2020 amidst the Covid-19 pandemic. This was 56% lower compared to the same period in 2019.
ART’s revenue declined by 16% to SGD208.5 million, while gross profit declined by 28% to SGD88.6 million. This was mainly attributed to the decrease in contributions from the divestment of Ascott Raffles Place Singapore and Somerset West Lake Hanoi and lower revenue from the existing portfolio.