Starwood Capital, Fosun Said to Consider Offers for Ascendas

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  • Suitors weigh bids for S$844 million Singapore hotel trust
  • Australian assets draw interest on currency, record tourists

Starwood Capital Group, the property investment firm, and Chinese billionaire Guo Guangchang’s Fosun International Ltd. are weighing bids for Ascendas Hospitality Trust, people with knowledge of the matter said.

Starwood Capital, which manages about $45 billion of assets, and Fosun are studying the Singapore-based hotel owner and could submit offers as early as the end of January, the people said, asking not to be identified as the information is private. Blackstone Group LP and Hong Kong’s Gaw Capital Partners have also been considering bids for Ascendas Hospitality, which has a market value of S$844 million ($588 million), people with knowledge of the matter said earlier this month.

Units of Ascendas Hospitality jumped 7.1 percent, the biggest gain since its listing in July 2012, to 75.5 Singapore cents at the close in Singapore.

The weakening Australian currency and record tourist arrivals are boosting overseas investors’ interest in the country’s hotel assets, according to Colliers International. Australia accounted for 56 percent of Ascendas Hospitality’s net property income for the quarter ended Sept. 30, followed by Singapore with 16 percent, according to a company presentation.

“Australia has steady growth in inbound arrivals and new supply of hotels is slow, so it’s an attractive market for investors,” Akshay Kulkarni, director for Asia Pacific at CBRE Hotels in Singapore, said by phone Tuesday. “All the boxes are ticked from an investment perspective with steady growth in returns, capital appreciation and safety of investments.”

Property Deals

Ascendas Hospitality said last month it’s reviewing strategic options after receiving unsolicited interest. A spokesman for Fosun declined to comment, while a spokeswoman for Ascendas Group said she couldn’t immediately comment. Calls to Starwood Capital’s Hong Kong office weren’t answered, and a U.S.-based representative for the investment firm didn’t answer calls outside regular business hours.

Any offer for Ascendas Hospitality would add to the $8.9 billion in acquisitions of Singapore real estate companies and property trusts announced in the past year, according to data compiled by Bloomberg. Lone Star Funds agreed in October to buy Saizen REIT’s Japanese assets for 44.7 billion yen ($379 million).

Ascendas Hospitality owns 11 hotels with 4,100 rooms in Australia, China, Japan and Singapore. Its properties include Novotel Sydney Central, Ibis Beijing Sanyuan and Park Hotel Clarke Quay, according to its website. It is backed by Ascendas Pte, which also runs a business park trust and an Indian property trust listed in Singapore.

Starwood Capital, run by Barry Sternlicht, agreed last year to buy U.S. apartments from Equity Residential for $5.4 billion in its biggest acquisition of non-hotel properties. Starwood Capital and Milestone Apartments Real Estate Investment Trust said in October they will buy Landmark Apartment Trust Inc., an owner of multifamily properties in the southern U.S., in a deal valued at $1.9 billion.

Fosun, which owns resort operator Club Mediterranee SA and a stake in Cirque du Soleil Inc., has businesses including insurance, pharmaceuticals and fashion. Its property portfolio includes the Lloyds Chambers office building in London and New York’s One Chase Manhattan Plaza.