ARA H-Trust to acquire Colorado hotel property for US$29m
Renald Yeo
THE managers of ARA US Hospitality Trust (ARA H-Trust) have proposed to acquire a 119-room Hilton-branded hotel property in the US for US$29 million.
The proposed acquisition is expected to be completed in the first quarter of 2023, subject to an independent valuation being commissioned.
Including all fees and expenses, the total acquisition cost is estimated to be US$30 million, the managers said in a bourse filing on Wednesday (Jan 4).
Managers of the stapled group expect the acquisition to be yield accretive. The pro forma impact of the distribution per stapled security is estimated to be 0.784 US cents, assuming the proposed acquisition was completed on Jan 1, 2021.
The stapled group will be funding the acquisition with cash, using net proceeds from its sale of five Hyatt Place properties in the third quarter of 2022. The five properties were previously sold for some US$40.3 million.
Located in Colorado Springs, the Home2 Suites by Hilton Colorado Springs South hotel property is well-placed in a growing sub-market and has a consistent demand base from the area’s military and aerospace presence, the managers said. Revenue per available room (RevPAR) in the Colorado Springs area has exceeded pre-Covid levels, and the hotel property’s RevPAR of some US$137 outperforms similar properties in the area, the managers added.
“(The acquisition) is reflective of the ongoing portfolio optimisation and rebalancing strategy to re-deploy capital into core assets to increase returns, profits and distributions,” said ARA H-Trust.
Stapled securities of Ara H-Trust closed Tuesday unchanged at US$0.35.
Copyright SPH Media. All rights reserved.
