Ascendas Hospitality Trust

Ascendas Hospitality Trust: proposes to acquire Park Hotel Clarke Quay, for $300m (not including acq fee of $3m and transaction fee of $5m), which translates to $893k per key. This compares with Colliers’ valuation at $308m. The hotel commenced operation in 2009 and consists of 330 guest rooms and 6 suites. The hotel will be leased to Park Hotel CQ for an initial term of 10 yrs with an option to extend for a further term of 5 yrs. The rental income will comprises $11.5m for the initial 12 mths, subject to escalation of 3% pa and variable rent components tied to the performance of the hotel. The managers will announce the financial effects of the acq as soon as they can be determined. AHTS trades at 5.7% fwd yield. The Street has 2 Buys and 2 Holds, with TP btwn $0.98 – 1.10.