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Ascott Residence Trust (ART) (ASRT.SI), which owns serviced apartments in Europe and Asia, is expanding into growth markets like India and Vietnam as it hopes to double assets over the next five years or so , its chief executive officer said.
“We hope to double our asset size. From 2006 to 2011, we actually tripled, but now I’m looking at double because we have a bigger base,” ART CEO Chong Kee Hiong told Reuters in an interview on Tuesday.
The Singapore real estate investment trust (REIT) currently has $2.8 billion worth of properties, of which about 60% are in countries with fast-growing hospitality sectors such as Vietnam, China and Singapore.
ART reported earlier this month its fourth quarter distribution per unit (DPU) rose 16% to 2.16 cents from a year ago, helped by stronger contributions from its Singapore and U.K. properties.
DBS Vickers, which has a "buy" recommendation, forecasts ART’s DPU to rise 8% this year to 8.1 cents, making it one of the best-performing Singapore Reits.
The shares have underperformed the Singapore market, however, rising 2.3% in the past 12 months compared with a 17% increase in the benchmark Straits Times Index.
To boost its portfolio, Chong said ART plans to acquire more properties in markets such as India and London from Ascott, the CapitaLand (CATL.SI) serviced residences unit that manages ART, as well as third parties.
Although ART does not own any properties in India now, it will likely buy a serviced apartment in Chennai from Ascott in the next 12 to 18 months.
