Ascott Residence Trust’s 10th Anniversary: 3 Quick Things Investors Should Know

Ascott Residence Trust  (SGX: A68U) had recently organised a celebratory event for its 10th anniversary.

As a brief background, Ascott Residence Trust is a real estate investment trust (REIT) that mainly owns serviced residences and rental housing properties. The REIT is managed by a wholly-owned subsidiary of CapitaLand Limited (SGX: C31).

Lim Jit Poh, the chairman of Ascott Residence Trust’s manager, gave a commemorative speech in the event. Here’re three interesting snippets from it.

The first touched on Ascott Residence Trust’s growth:

“We made our appearance ten years ago in March 2006 as the first hospitality Reit with just 12 properties comprising 2,068 apartment units scattered in seven cities and five countries with an asset size of just $856 million.

Ten short years down the road, Ascott Reit has become a global player with 91 properties (79 more than 2006), having 11,887 apartment units (9,819 more than initially), in 38 cities (31 more than when first started) and 14 countries (9 more than 2006).

The biggest increase, has, however, been in its asset size. It is now an enviable $5.4 billion undertaking, $4.5 billion more than its launch and moving fast towards our public released target of $6 billion in 2017.”

Ascott Residence Trust has come a long way over the past decade. The REIT has expanded in terms of the number of properties in its portfolio, its geography exposure, and its asset size.

In his speech, Lim gave props to the REIT’s sponsor – that is, CapitaLand – for facilitating the REIT’s growth. But, Ascott Residence Trust also had some achievements of its own. That forms the second interesting snippet from Lim:

“Established ten years ago with presence only in Asia, we became proud owners of our assets in Europe in October 2010, four years after our initial listing. Another five years later in August 2015, we ventured into the USA before our parents. We were not trying to teach our parents what to do. I like to believe that we were a test bed for the huge and rich parent to do more when we are firmly rooted.”

The benefits of the REIT’s expansion might not set an investor’s pulse racing. Growth is great in many areas, but the total unitholder distribution growth was ‘just’ 18% over the last ten years, according to Lim.

“In terms of asset value, the compound annual growth rate (CAGR) is 18.8%. In terms of number of apartment units, the CAGR is 19.1%. In terms of number of cities it is 18.4%. In terms of number of countries it is 10.8%. But to the unitholders, the CAGR in turnover terms is 17.2% but the greatest reward for them is the total unitholder distribution growth of 18.0%.”

Ascott Residence Trust has a target to grow its asset size to $6 billion by 2017. It remains to be seen if unitholders would be able to fully benefit alongside the asset growth.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.