The Singapore-based company will pay US$163.5 million for the 411-key Element New York Times Square West hotel, marking the group’s first US acquisition.
“Our first acquisition in the US is a strategic step that will enable us to capitalise on the burgeoning hospitality market,” explained Lim Jit Poh, chairman of Ascott Residence Trust Management Ltd (ARTML).
“The US economy has been growing steadily in the past few years and is forecasted to expand by 2.4% in 2015 and 2.5% in 2016. Recovery in the US hospitality market has also gained momentum. Revenue per available room (revPAR), particularly in gateway cities like New York where there is high demand for accommodation, has improved significantly.
“With future demand growth expected to continue to outpace supply, we are confident that this acquisition will further enhance Ascott Reit’s portfolio and unit-holders’ returns,” he added.
Ascott Reit launched in Asia Pacific in 2006, expanded to Europe in 2010 and recently acquired three serviced residences and four rental housing properties in Australia and Japan. Lim said that the company’s entry in to the US would “catapult Ascott Reit into a global hospitality player”.
Following the acquisition, the property will continue to be operated under the Element brand through a franchise agreement between LG-39 Management LLC and Starwood Hotels & Resorts.
“Ascott Reit’s focus is on properties for extended stay and Element is a widely recognised international brand for extended stay with an established sales network. We expect the property to continue to perform well and further boost the performance of Ascott Reit’s portfolio,” said Ronald Tay, ARTML’s CEO.