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Ascendas Australia Hotel Trust's purchase of Melbourne serviced apartments axed

ASCENDAS Australia Hotel Trust (AAHT)'s A$120 million (S$113.2 million) acquisition of serviced apartments in Melbourne has been terminated, said Ascendas Hospitality Trust on Friday.

The trustee of AAHT had entered into a contract with UEM Sunrise (La Trobe Street) to buy the serviced apartments component of a mixed-use development at 224–252 La Trobe Street, Melbourne, as announced on Dec 3, 2015.

But issues relating to the specifications and the condition of the property arose, resulting in a mutual agreement to terminate the contract.

Pursuant to the deed of termination dated Sept 13, the deposit of A$5 million will be returned to the purchaser together with an agreed compensation sum to cover expenses incurred.

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Steps are being taken to terminate the management agreement entered into on Oct 18, 2016 in relation to the property.

The termination of the acquisition is not expected to have any material adverse impact on the net property income and distribution per issued and paid-up stapled security in Ascendas Hospitality Trust for the financial year ending Dec 31, 2019.

It is also not expected to have any impact on the terms of the proposed combination of Ascott Residence Trust and Ascendas Hospitality Trust announced on July 3.

Ascendas Hospitality Trust closed at S$1.07 on Friday, down one Singapore cent or 0.93 per cent.