Ascott Residence Trust (Ascott Reit) has entered into a sale and purchase agreement (SPA) to buy a prime property located in Hamburg, Germany for €37.5 million (approximately S$59.4 million).
The 166-unit Madison Hamburg (pictured) will be Ascott Reit’s first acquisition in the city and will add to the trust’s two serviced residences in Germany – Citadines Arnulfpark Munich and Citadines Kurfürstendamm Berlin.
“This is an attractive opportunity which is in line with Ascott Reit’s strategy to expand in Asia, London, Paris and key cities in Germany,” said Lim Jit Poh, Chairman of Ascott Residence Trust Management Limited (ARTML).
He added that with Germany’s strong economy and Hamburg’s commercial potential, Ascott Reit’s venture will “further enhance its diversification across property and economic cycles”.
Ronald Tay, Chief Executive Officer of ARTML, said: “Madison Hamburg is a prime asset with a strategic location. The acquisition is yield accretive to Ascott Reit as Madison Hamburg is expected to deliver a stable EBITDA yield of 7.0 percent compared to its funding cost.”
“We will be acquiring Madison Hamburg with an existing master lease, comprising a fixed and variable rent. The fixed component alone amounts to 80 percent of the total annual rent and will further contribute to Ascott Reit’s income stability.”
Meanwhile, Madison Hamburg will still be managed by veteran local operator Marlies Head who has been its manager since 1993.
Following the acquisition, Ascott Reit’s German assets now comprise 10 percent of its European portfolio value of S$1.2 billion.
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