CapitaLand Ascott Trust - Expanding Horizons With EFR

CapitaLand Ascott Trust - OCBC Investment 2023-08-07: Expanding Horizons With EFR

CapitaLand Ascott Trust - Expanding Horizons With EFR

SGinvestors.io

Published: 2023-08-09 05:25 AM

CapitaLand Ascott Trust (SGX:HMN)

CapitaLand Ascott Trust (SGX:HMN) has announced an equity fund raising (EFR) to raise gross proceeds of approximately S$303.1m. This includes a private placement to raise S$200m, which was 2.7 times covered. See CapitaLand Ascott Trust's announcement dated 02 Aug 2023.
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Further to that, CapitaLand Ascott Trust will also raise S$103.1m through a pro-rata and non-renounceable preferential offering. A total of 100.5m preferential offering new stapled securities will be issued at a unit price of S$1.025, which represents a 1.7% discount to the private placement issue price and 8.4% discount to the VWAP. The entitlement ratio is 29 preferential offering units per 1,000 existing shares.

Proposed acquisitions of three properties are expected to be DPS-accretive

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Temple Bar Hotel in Dublin, and
Ascott Kuningan Jakarta in Indonesia.

These properties are located in prime locations of key capital cities where revenue per available unit (RevPAU) in 1H23 has recovered beyond pre-COVID levels. In particular, management sees an opportunity to rebrand The Cavendish London into a high-end hotel post-renovation, thereby lifting the EBITDA yield of the property from 4.1% to 6.5% on a FY22 pro forma basis.

The total acquisition cost for the portfolio is ~S$378.6m, which will be funded through a combination of debt and equity. On a FY22 pro forma basis, the portfolio has an EBITDA yield of 5.1%.

CapitaLand Ascott Trust’s total distribution is expected to increase by S$13.5m post-acquisition, translating to a DPS accretion of 1.8% (excluding the effects of renovations at The Cavendish London and Temple Bar Hotel, as well as cost of financing milestone payments of S$64.1m and S$30.5m in 4Q25 and 4Q24 respectively). This represents an increase in distribution yield from 5.4% to 5.5% (based on a unit price of S$1.05).

Further AEIs announced to uplift property values

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Above is an excerpt from a report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.

SGinvestors.io

Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2023-08-07

Read also OCBC's most recent report:
2025-04-29 CapitaLand Ascott Trust - Jitterbug.

Previous report by OCBC:
2025-02-03 CapitaLand Ascott Trust - Out With The Old, In With The New.

Price targets by other brokers at CapitaLand Ascott Trust Target Prices.

Listing of research reports at CapitaLand Ascott Trust Analyst Reports.

Relevant links:
CapitaLand Ascott Trust Share Price History,
CapitaLand Ascott Trust Announcements,
CapitaLand Ascott Trust Dividend Payout Dates & Corporate Actions,
CapitaLand Ascott Trust News