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CLAS enters into IPTs including the renewal of serviced residence management agreements

Felicia Tan
·3-min read

As at Oct 3, the total value of all the IPTs entered into between CLAS, CLI and its subsidiaries is at $520.4 million.

The manager of CapitaLand Ascott Trust (CLAS), on Oct 3, announced that the REIT has entered into several interested person transactions (IPTs).

The IPTs include the renewal of each of the serviced residence management agreements for Citadines Trafalgar Square London, Citadines Barbican London, Citadines Holborn-Covent Garden London between a subsidiary of the REIT, FBM London and Ascott Hospitality Management (UK) Ltd (AHMUK).

FBM London will pay AHMUK an estimated amount of $22.5 million for Citadines Trafalgar Square London, $11.0 million for Citadines Barbican London and approximately $18.5 million for Citadines Holborn-Covent Garden London as fees for the management services provided by AHMUK.

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The fees are calculated based on a schedule of percentages of the forecast total revenue and gross operating profit for each fiscal year during the term of the services rendered. AHMUK has undertaken to pay FBM a minimum guaranteed income for each property as set out in each of the SRMA respectively.

Appointment of AIMPL for Riverside Hotel Robertson Quay

In the same statement, the REIT manager says it will be appointing Ascott International Management Pte. Ltd (AIMPL) to provide technical advisory services and hotel management services for Riverside Hotel Robertson Quay. The hotel management agreement and technical advisory services agreement (HMA), which was entered into by the manager of Ascendas Hospitality Business Trust (AHBT) and AIMPL, is effective from Oct 1 and will continue for a period of 20 years from completion of rebranding and renovation.

The manager of AHBT will pay AIMPL an estimated amount of $56.6 million for the services provided under the term of the HMA. According to CLAS, its managers had sought comparative proposals from hospitality operators (on the basis of master leases and management agreements) and found AIMPL’s terms to be the most attractive.

Extension of master lease

In addition, the REIT has sought a short-term extension of the master lease with Ascott Orchard Management (S) Pte. Ltd. (AOMPL) for Ascott Orchard Singapore from Oct 10 to Nov 30. The rent for the extension is estimated to be at $2.8 million.

CLAS is formerly known as Ascott Residence Trust (ART) before its name change on Sept 27.

As at Oct 3, CapitaLand Investment (CLI) has direct and deemed interests of approximately 37.46% of the total number of stapled securities in CLAS. The managers of the REIT are also wholly-owned by CLI. CLI is therefore regarded as a controlling stapled security holder of CLAS and a controlling shareholder of the managers.

AHMUK, AIMPL and AOMPL are wholly-owned subsidiaries of CLI and are deemed as interested persons and interested parties of CLAS.

Each of the IPTs would exceed 3% of CLAS’s latest net tangible assets (NTA).

As at Oct 3, the total value of all the IPTs entered into between CLAS, CLI and its subsidiaries is at $520.4 million.

Units in CLAS are trading 0.5 cent lower or 0.51% down at 97.5 cents.

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