Ascott Signs A$500 Million Deal in Australia

Ascott has entered into a strategic partnership with Quest Serviced Apartments, a serviced apartment provider with 112 properties in Australia.

Ascott expects to invest up to A$500 million (Sin$560 million) to acquire new properties that Quest will secure for its franchise in Australia over the next five years.

Ascott will have a right of first refusal to acquire the properties sourced by Quest. Quest will then provide a lease for the properties, which will be operated under franchises using the Quest brand.

In addition, Ascott has signed an agreement to acquire a 20% stake in Quest for A$28.8 million (Sin$32.3 million). As part of the agreement, Ascott has the option to increase its stake in Quest to 30%.

Ascott Reit Expands to Greater Sydney by Acquiring Three Serviced Residences for A$83.0 Million

In a separate agreement, Ascott’s real estate investment trust, Ascott Residence Trust (Ascott Reit), will acquire three operating serviced residences in Greater Sydney from Quest for A$83.0 million (approximately Sin$93.0 million).

These are Ascott Reit’s maiden acquisitions in New South Wales.

The accretive acquisitions at an EBITDA yield of 7.7% are expected to increase Ascott Reit’s FY 2013 distribution per unit from 8.40 cents to 8.46 cents on a pro forma basis.

Ascott Reit will receive fixed rent by taking over the leases for the three serviced residences - Quest Sydney Olympic Park, Quest Campbelltown and Quest Mascot - and they will continue to be operated under franchises using the Quest brand.