CapitaLand announced its entry into an agreement which will offload its entire 24.09 percent stake in Central China real Estate (CCRE). The CCRE stakes will be dealt with Joy Bright Investments, the Hong Kong-listed CCRE's remaining shareholder. A price tag of $363 million is expected to be slapped on to the share, according to Business Times SG.
Lucas Loh, the president of CapitaLand Group's China division, said that the company regularly takes a look at their existing investments. They make a decision based on potential opportunities that will give good returns and stability to the company's existing strategy. While CCRE has generated very stable returns over the years, CapitaLand said that divesting the asset would allow them to remain competitive in other opportunities within the core business.
CapitaLand's CCRE stakes, when broken down to per share levels, will have a $0.55 price tag. The stock exchange closed with the shares up to $2.69.
CapitaLand's moves aren't limited to just off-loading assets. Channel News Asia reported that the Singapore-based company will be combining Ascott Residence Trust (Ascott Reit) and Ascendas Hospitality Trust (A-HTRUST) to create the biggest hospitality trust in the Asia-Pacific region so far. The combination aims to become the eighth largest hospitality trust globally, worth a combined asset value of 7.6 billion SGD.
In Singapore, it will be the seventh biggest trust listed in the local Stock Exchange. This transaction brings together Ascott Reit's global portfolio, which comprises of serviced residences, along with A-HTRUST's 14 hotels in the region. The resulting portfolio boasts of 88 properties with more than 16,000 units in 15 countries, spread across the Asia-Pacific, Europe, and the USA.
The combined entry, according to Ascott Residence Trust Management Limited's chairman Bob Tan, will have access to a larger capital base as well as a bigger debt room worth 1 billion SGD. This will leave the combined entity a bigger room for financial flexibility, which they can use to seek more acquisitions and enhancements that will add value, added the chairman.
The consideration for the combination will be 1,235.4 million SGD, with about 61.8 million in cash and 901.8 million in Ascott Reit-BT stapled units. Ascott Reit will get A-HTRUST's stapled units on a consideration of 1.0868 SGD per unit, with about 0.0543 SGD in cash and 0.7942 Ascott Reit-BT stapled units.
CapitaLand seeks bigger moves with this series of actions. In the real estate scope of Southeast Asia, expect the real estate company to make some more surprising moves to improve.
