The Ascott REIT unitholder will have to be patient, as benefits for Ascott REIT may not be as immediate as the price uplift that was advantageous to the stapled security holders of A-HTrust. Ascott REIT unitholders will have to be satisfied by its future prospects as laid out in the unitholders’ circular.
SINGAPORE (Oct 14): During a recent joint roadshow by the managers of Ascott Residence Trust (Ascott REIT) and Ascendas Hospitality Trust (A-HTrust), an Ascott REIT unitholder wondered why its unit price had not moved since July 3, when the merger between Ascott REIT and A-HTrust was announced. In contrast, A-HTrust’s unit price is up 11.2%. Since the start of the year, A-HTrust is up 41%, while Ascott REIT has gained 22%.
Usually, the acquired entity outperforms and the acquirer underperforms. Still, Ascott REIT continues to gain ground despite being the acquirer, partly because the US Federal Reserve has articulated that it is committed to an easier interest rate policy. OUE Commercial Real Estate Investment Trust — which acquired OUE Hospitality Trust — is up 17%.
