Singaporeβs Ascott Residence Trust (ART) has sold a serviced residence tower in China to an unnamed buyer for RMB1.05bn (β¬135m).
The 168-unit Somerset Xu Hui Shanghai, located in a prime residential district of Shanghai, was completed in 1999.
The trust said net proceeds of approximately RMB944.6m might be used to pare down ART debt, or to fund potential acquisitions. It said the price achieved was 171% above the propertyβs book value.
Ascott described the divestment as part of the trustβs on-going portfolio reconstitution strategy to unlock strong underlying value from the property β and to redeploy proceeds to higher-yielding assets to enhance the returns of ARTβs portfolio.
The trustβs manager said that due to the ongoing COVID-19 situation in China, and strict government regulations to cool the countryβs property market, the company saw βlimited operational growth prospects and capital appreciation upside to the propertyβ.
βAs such, the sale presents an opportunity to unlock underlying value and to re-deploy the proceeds in higher-yielding assets to enhance the returns of ARTβs portfolio.β
To read the digital edition of the latest ΒιΆΉΣ³» Real Assets magazine click here.
