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ART buying another property in Australia

ASCOTT Residence Trust (ART) is acquiring an 84-unit serviced residence in Australia for a total purchase price of A$28.5 million (S$35.6 million).

In a statement released yesterday, ART said the acquisition is yield-accretive at an estimated annualised property yield of 6.1 per cent in the forecast year 2008.

The freehold property, currently known as Chifley On The Terrace, is located along the prime St Georges Terrace in Perth’s central business district. ART said the acquisition will be funded by borrowings, which will bring its gearing to 34.5 per cent. Upon completion of the acquisition, the property will be rebranded Somerset St Georges Terrace, Perth and will be managed by Ascott International Management (Australia).

Chong Kee Hiong, CEO of ART manager Ascott Residence Trust Management Ltd, said: ‘Perth is an attractive market as there is high potential for organic growth.’ St Georges Terrace’s location makes it attractive to corporate travellers visiting the city, he added.

Citing Deloitte’s HotelBenchmark Survey, ART said Perth was the best-performing Australian city in 2007, with average room rates growing at 15 per cent in the first nine months of that year to reach A$159 and occupancy averaging 84 per cent.

Mr Chong added: ‘In view of the limited supply of good-quality accommodation in Perth currently and in the next few years, we anticipate that room rates in the city will continue to grow.’

Comprising 84 studios and one-bedroom apartments, the Perth property enjoys an average occupancy level of about 90 per cent and provides facilities such as daily housekeeping services, a bar and restaurant, function rooms and car parking.

Upon completion of its latest acquisition, ART’s total portfolio value will stand at $1.37 billion, comprising 3,550 units in 37 properties in 11 cities across seven countries.

Its assets in Australia will make up 4 per cent of the total portfolio value, an increase from one per cent before the acquisition. ART’s other property in Australia is Somerset Gordon Heights in Melbourne’s central business district.

 

Source: Business Times 22 Jan 08

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