ART – BT

Ascott Reit sells Jakarta asset

ASCOTT Residence Trust (Ascott Reit) has agreed to sell Country Woods in Jakarta for $33.91 million. The sale price – the highest submitted in a bidding process – is 60 per cent above the property’s valuation of $21.2 million at June 30. Ascott Reit said that it expects a net gain of $5.7 million from the sale. The transaction is expected to be completed in the fourth quarter.

Ascott Residence Trust Management chairman Lim Jit Poh said: ‘The sale proceeds from the divestment will provide Ascott Reit with greater financial flexibility to maximise returns to unitholders. Proceeds from the sale will be used to pare the group’s debt or for funding future acquisitions.’

The sale is in line with Ascott Reit’s strategy to unlock the underlying value of property that has reached a stage that offers limited growth, and to redeploy proceeds to optimise the yield of its portfolio, the trust said. Country Woods would have required significant capital expenditure to compete with increased competition in South Jakarta. the Reit said. The implied exit yield of Country Woods is 2.9 per cent based on the sale price of $33.9 million.

Following the divestment, Ascott Reit will continue to have a presence in Indonesia through Ascott Jakarta and Somerset Grand Citra, both of which are in the heart of the city’s business and shopping district. Ascott Reit said that it would continue to seek yield-accretive acquisitions to expand its portfolio and look for opportunities to divest properties that have reached optimal yield.