Ascott Residence Trust (ART) announced that it has acquired, for JPY 8b (S$95.2m), a prime hotel in Tokyo, Japan. The 206-unit hotel is strategically located in Shinjuku and is currently operating as Best Western Shinjuku Astina, which will be rebranded into a Citadines-branded serviced residence by ART.

Management notes that the asset has been operating above 90% occupancy with consistent growth in the average daily rate and believes ART can leverage on its strong branding and global distribution network to further improve operating performance. The acquisition is expected to be accretive with an EBITDA yield of 4.3% and would increase, on a pro forma basis, ART’s FY13 DPU by 0.6% from 8.40 S-cents to 8.45 S-cents. Maintain BUY with our fair value of S$1.33 under review.

Source: OCBC Research - 17 Oct 2014