CapitaLand Ascott Trust (CLAS) HMN has completed the divestment of four of its properties in regional France for EUR44.4 million ($64.7 million).
The four properties, Citadines Croisette Cannes, Citadines Prado Chanot Marseille, Citadines Castellane Marseille and Citadines City Centre Lille, were divested to an unrelated third party.
The sum received represents 63% above the properties’ book value as at Dec 31, 2022, with the REIT receiving net proceeds of around EUR34.1 million. The exit yield, based on CLAS’s FY2022 ended Dec 31, 2022 ebitda, is about 4% with CLAS receiving a net gain of some EUR1.2 million.
Following the completion of the divestment, CLAS has 12 properties in France that are predominantly located in Paris. Of the 12 properties, La Clef Tour Eiffel Paris and Citadines Les Halles Paris are undergoing asset enhancement initiatives (AEIs). Both properties will remain open during their AEIs, which include the refurbishment of guest rooms and general public areas.
“We have divested the four mature properties as part of our active portfolio reconstitution strategy to deliver sustainable returns to our stapled securityholders. As these properties have reached the optimal stage of their life cycles, the divestment enables CLAS to redeploy the proceeds to higher-yielding assets. Proceeds from the divestment will be used for our AEI in Europe. It will also be used to partially finance CLAS’ recent proposed acquisition of three prime lodging assets in the capital cities of London, Dublin and Jakarta,” says Serena Teo, CEO of the manager.
CLAS had signed a memorandum of understanding (MOU) with its sponsor, The Ascott Limited, in August for a proposed acquisition of three lodging assets in London, Dublin and Jakarta at an agreed property value of $530.8 million.
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“Over the past three years, we have successfully divested properties at a premium to book value and invested the proceeds in higher-yielding assets, increasing our total distribution. With the recent proposed acquisition, we expect to further increase our total distribution by $13.5 million and our distribution per stapled security (DPS) by 1.8% on a FY2022 pro forma basis upon completion of the acquisition,” she adds. “The ebitda yield of the proposed acquisition is 6.2% on a FY2022 pro forma basis, more than 2% higher than the exit yield from the divestment of the four properties in regional France. Post-renovation for The Cavendish London and Temple Bar Hotel as well as milestone payments for the acquisition, we expect to achieve an increased yield of 6.8%.”
Units in CLAS closed 0.5 cents lower or 0.51% down at 97.5 cents on Sept 22.
