Capitaland Ascott Trust Divest Somerset Olympic Tower Tianjin Under Portfolio Reconstitution

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CapitaLand Ascott Trust’s SGD-denominated public bond due 2022 sold out AddThis Sharing ButtonsShare to FacebookFacebookFacebookShare to TwitterTwitterTwitterShare to LinkedInLinkedInLinkedInSINGAPORE (Nov 4): CapitaLand Ascott Trust (CLAS) has entered into an agreement to divest Somerset Olympic Tower Tianjin in China to an unrelated third party. The serviced residence, which comprises 185 units and is located in the heart of Tianjin’s financial district, is expected to be divested at above book value. According to the group, the divestment is in line with its portfolio reconstitution strategy to enhance the quality of its portfolio and optimise returns for investors. Advertisement Commenting on the divestment, CLAS’s CEO Serena Teo says: “We continually reconstitute CLAS’ portfolio by divesting mature properties such as Somerset Olympic Tower Tianjin and redeploying the proceeds towards more optimal uses.” She adds that CLAS’ properties in China have since contributed 1.4% to the group’s gross profit in 1HFY2024. The divestment of Somerset Olympic Tower Tianjin is expected to have minimal impact on CLAS’ gross profit. This divestment follows a series of divestments by the group this year. To date, CLAS has divested a total of $400 million in assets. These divestments were reportedly carried out at a premium to book value, resulting in $54 million in gains for the group. In conjunction with the divestment, CLAS has also announced that proceeds from the sale of Citadines Mount Sophia Singapore will be utilised to fund the proposed acquisition of lyf Funan Singapore in an off-market transaction. The purchase was announced on Oct 1. Citadines Mount Sophia Singapore was divested in March at an exit yield of 3.2%. The acquisition of lyf Funan Singapore is expected to provide an ebitda yield of 4.7%. Additionally, the group has completed the asset enhancement initiative (AEI) for Citadines Holborn-Covent Garden London. The AEI is part of the group’s plan to enhance the quality of its portfolio and increase its distribution income. Based on the group’s current plans, CLAS has completed AEIs for five of its properties and is expected to complete the remaining three properties between 4QFY2024 and 2026. Speaking on the group’s plans going into FY2023, Teo says: “With CLAS’ strong financial position, we stand ready to capture opportunities to deliver accretive growth for our stapled security holders.”