As part of its capital recycling strategy, Ascott Residence Trust (ART) announced that it has divested its serviced residence property known as “Salcedo Residences” (comprising 71 condominium units and 71 parking lots) in Makati City, Philippines, for a sale consideration of PHP240m (~S$7.2m). This divestment is to an unrelated party, and is sold at more than seven times its last independent valuation of PHP34m (as at 30 Jun 2015). Besides the attractive disposal price, management believes the asset offers limited growth and hence comes at an opportune time to sell it. Given the relatively small scale of this transaction, we are keeping our BUY rating and S$1.44 fair value on ART.

Source: OCBC Research - 3 Nov 2015