Ascott Residence Trust (Ascott Reit) acquires 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, one of the most visited locations in the world, with more than 40 million visitors each year.
Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “The U.S. market was our top contributor to revenue in 2016 and 1Q 2017. Acquisition of yet another quality property in Manhattan would strengthen our foothold in New York, which saw record high visitor arrivals in 2016. New York has strong corporate demand for accommodation as business travelers form a quarter of all visitors annually, generating over 30% of visitor spending. Manhattan has the strongest performing hotel market in the U.S. with the highest revenue per room. This DoubleTree by Hilton Hotel New York – Times Square South, as well as Sheraton Tribeca New York Hotel and Element New York Times Square West hotel, which we acquired in the last two years, enjoy high average occupancy rate of more than 90%. We expect this accretive acquisition to enhance Ascott Reit’s portfolio as we remain focused on creating stable and growing returns to Unitholders.”
Mr Tan added: “We will continue to seek opportunities to acquire a scalable portfolio of stable, operating assets in key gateway cities in the U.S. Besides the U.S., we continue to actively seek accretive acquisitions in gateway cities in markets such as Australia, Japan and Europe.”
Ms Beh Siew Kim, ARTML’s Chief Executive Officer, said: “This acquisition will reinforce Ascott Reit’s position as the largest hospitality REIT by asset size and the most geographically diversified REIT in Singapore. With this acquisition, the U.S. would be our fourth biggest market, forming 12.3% of Ascott Reit’s total assets worth S$5.3 billion3, following closely after China, Japan and Singapore. We continue to maintain a balanced portfolio across the various geographies to provide stable returns to Unitholders.”
Ms Beh added: “The freehold property will continue to be managed by an established local operator under a franchise of the upscale DoubleTree by Hilton brand. The property has a good mix of corporate and leisure guests, and has been achieving strong performance since its opening in 2008. We expect demand for the property to increase as the nearby Hudson Yards, the largest private development in the U.S., progressively opens. The US$30 billion Hudson Yards spanning 28 acres contains more than 18 million square feet of office, retail and residential space, and will be home to some of the world’s top firms.”
DoubleTree by Hilton Hotel New York – Times Square South is located on 36th Street, within walking distance to many of Manhattan’s attractions such as Times Square, Madison Square Garden, the Jacob Javits Convention Center and the Empire State Building. The property offers a range of stylish rooms and facilities including a 24-hour fitness centre, business centre, meeting rooms, a restaurant and bar. It is also close to Penn Station, the busiest train station in North America which sees over 200 million passengers a year travelling to and from other gateway cities in the U.S.
Located a few blocks from the property, the Hudson Yards opened its first office skyscraper, the 10 Hudson Yards in May 2016, and is home to companies such as Coach Inc., L’Oréal, The Boston Consulting Group, SAP, VaynerMedia, Intersection and Sidewalk Labs. While the entire development is expected to be completed in 2025, 88% of the 5.8 million square feet of office space, currently under construction or has been completed, is already committed as of December 2016. Firms such as Blackrock, Kohlberg Kravis Roberts and Time Warner will be moving their headquarters to Hudson Yards, which will also house more than 100 shops and restaurants. This mega development will redefine Manhattan’s west side and give an additional vitality boost to the Midtown hospitality market.