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CDL Hospitality Trusts makes first acquisition in Europe; launches S$255.4m rights issue
CDL Hospitality Trusts (CDLHT) announced on Tuesday the acquisition of Pullman Hotel Munich and its office and retail components for about 100 million euros (S$153.8 million), which will be fully funded by debt financing and is accretive with a net property income yield of 5.6 per cent for FY 2016.
This is CDLHT's first acquisition in continental Europe. The hotel, which has a four-star rating, is located in close proximity to major business districts.
In addition, CDLHT has also launched on Tuesday a fully underwritten and renounceable rights issue to raise S$255.4 million. The company said that this is expected to enhance CDLHT's financial flexibility through reduced gearing and increased debt headroom.
The partial repayment of existing higher interest-bearing borrowings will also lower its weighted average cost of debt and further improve its interest coverage ratio, CDLHT said.