Ascott Reit buys Manhattan hotel for US$106m

ASCOTT Residence Trust (Ascott Reit) on Wednesday said that it is acquiring the 224-unit DoubleTree by Hilton Hotel New York - Times Square South for US$106 million.

The freehold property is located in Midtown Manhattan near Times Square and within walking distance to other attractions such as Madison Square Garden, the Jacob Javits Convention Center and the Empire State Building. It is also close to Penn Station, the busiest train station in North America.

The acquisition, at an Ebitda (earnings before interest, tax, depreciation and amortisation) yield of 6 per cent, is expected to increase Ascott Reit's pro forma distribution income in FY2016 by S$1.2 million. This translates to a rise in distribution per unit from 7.23 cents to about 7.29 cents on a pro forma basis.

The acquisition will be funded by bank loans and/or perpetual securities. With this acquisition, Ascott Reit owns three properties in Manhattan, comprising 1,004 units.