Serviced residence leader Ascott Group has launched a new real estate investment trust, the Ascott Residence Trust (ART).

The preferential offering of ART is exclusively for Ascott shareholders. Capital Land, which owns approximately 68 per cent of Ascott, will also subscribe to its full entitlement in the proposed ART giving the company approximately 213.6 million ART units, which represents a 47 per cent stake in ART. Including Ascott’s sponsor stake of up to approximately 30 per cent, CapitaLand‘s effective stake in ART would be 67 per cent.

The listing of ART, subject to the approval of Ascott’s shareholders, is expected to take place at the end of March 2006. ART will be a capital efficient asset-owning vehicle and acquisition platform, whilst Ascott will focus on strengthening its global brand, growing fee-based income and incubating new serviced residences and rental housing properties.
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“For the shareholders of both CapitaLand and Ascott, this is yet another move to unlock shareholder value and improve capital productivity within the CapitaLand Group,” says Mr Liew Mun Leong, CapitaLand Group’s President and CEO. “With ART set up as an asset-owning and acquisition vehicle, Ascott will be in a much better and stronger position to grow its global portfolio from more than 15,00 serviced residence units currently to 25,000 units by 2010.”
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To date, CapitaLand has pioneered two REITs in Singapore, one for the retail sector, CapitaMall Trust (CMT), and another for the commercial sector, CapitaCommercial Trust (CCT)

More recently, it was the strategic partner and investor for the Link REIT, Hong Kong’s first, and the world’s largest, REIT IPO.

The Link REIT’s portfolio covers the Hong Kong Housing Authority’s shopping malls, car parks and markets. These REITS have been successful since listing.

CapitaLand says it is confident that ART will be equally successful, given its exposure to the high-growth Pan-Asian economies such as China, and the bright outlook for the serviced residence sector in the region.

REIT, portfolio,Ascott Group Singapore, Thailand