SINGAPORE (Nov 28): Ascendas Hospitality Trust (A-HTRUST) is acquiring Ibis Ambassador Seoul Insadong for KRW77.5 billion ($94.5 million).
Completed in 2013, the 363-room hotel is located near Jung-gu, one of the major business districts in Seoul. The hotel also has a restaurant, a bar, two meeting rooms, a gym, a sauna, as well as 24 carpark spaces.
A-HTRUST’s manager says the hotel is located in close to prominent tourist destinations including the Insadong retail precinct, Changdeokgung Palace and Jongmyo Shrine. The facility is also easily accessible via the nearby Jongno 3-ga Station, which connects the hotel to other parts of Seoul.
The acquisition is expected to be accretive to A-HTRUST stapled securityholders.
“On a pro forma basis, assuming A-HTRUST had owned the hotel since April 1 2017, the DPS for FY2017/18 would have increased to 5.87 cents from 5.86 cents,” says the manager in its filing.
The consideration for the hotel represents a discount of 3.1% to the hotel’s latest valuation and translates to a pro forma net property income yield of 4.6%.
The acquisition is expected to be fully funded by debt and is expected to be completed by end of the year.
The current hotel operator is part of Ambassador Hotel Group, a hotel group in South Korea with about 60 years of experience. As Ambassador Hotel Group and AccorHotels have a joint investment in a hotel management company, the hotel can tap on the loyalty programme of AccorHotels which has 41 million members.
The latest acquisition follows A-HTRUST’s maiden entry into Seoul with the acquisition of The Splaisir Seoul Dongdaemun and brings the total number of freehold properties to 13 out of 14 hotels in A-HTRUST’s portfolio.
Year to date, units in A-HTRUST are down 9.3% to close at 798 cents at the close on Wednesday.
