CapitaLand Ascott Trust (CLAS) has announced the divestment of Citadines Mount Sophia Singapore to an unrelated third party for S$148m ($110.10m).
The transaction for the serviced residence hotel is set at 19.4% above its book value.
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The net proceeds from the divestment are anticipated to be S$138.6m ($103.11m).
With an exit yield of approximately 3.2%, CLAS expects to recognise a net gain of S$14.6m ($10.86m).
The divestment process is anticipated to be completed in the first quarter of 2024.
CapitaLand Ascott Trust Management and CapitaLand Ascott Business Trust Management CEO Serena Teo said: “We are divesting Citadines Mount Sophia Singapore at close to S$1m per key, which is a significant premium to book value.
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By GlobalData“Including Citadines Mount Sophia Singapore, CLAS has announced divestments of S$408.1m of assets at a premium to book value in the last eight months. The divestment of ten mature assets will unlock S$38.9m in gains, at an average exit yield of about 3.8%.
“We aim to use the capital to reduce debt, fund our asset enhancement initiatives (AEI) or redeploy it into higher-yielding investments to increase the returns of our portfolio. The divestments can offer CLAS greater financial flexibility, potentially lowering our gearing by close to 2% points.”
Citadines Mount Sophia Singapore features 154 units with a range of apartment sizes, from studios to two-bedroom units.
Each apartment features a kitchen, en-suite bathrooms, separate living and dining spaces, complimentary Wi-Fi connectivity, and more.
Additional amenities include a gym, launderette, and a residents’ lounge with continental breakfast.
Following divestment, CLAS will have four lodging properties in Singapore.
The company currently operates three properties, namely Ascott Orchard Singapore, lyf one-north Singapore, and The Robertson House by The Crest Collection.
The 192-unit Somerset serviced residence, located in Clarke Quay precinct, is under development and is expected to be completed in the second half of 2025.
In addition, CLAS has completed the divestment of Courtyard by Marriott Sydney-North Ryde last month.
This sale is part of a broader strategy involving the divestment of two mature hotels in Australia.
The sale of the second property, Novotel Sydney Parramatta, is expected to be finalised in the third quarter of 2024.
