SINGAPORE (Jan 9): Ascott Residence Trust (Ascott REIT) on Wednesday entered into a sale and purchase agreement to divest Ascott Rafles Place Singapore for a consideration of $353.3 million.

The buyer is said to be investor Cheong Sim Lam, whose family developed International Plaza and the Hyatt Regency Singapore.

Located at 2 Finlayson Green, the consideration is at a 64% premium over the independent valuation of the property of $215 million as at Dec 31.

This means the property is not being put to its best use as a serviced residence and could perhaps gain a higher valuation if the new buyer transform it into an office and commercial property.

Ascott REIT's trustee-manager says the buyer has paid 15% of the sale price as deposit and will pay the balance upon completion of the sale, which is expected to be by May 9.

After accounting for transaction-related expenses, Ascott REIT is expected to realise a net gain of about $134 million.

The REIT intends to use the sales proceeds to pare down the debts of Ascott REIT, fund potential acquisitions and/or for other general corporate purposes.

 Units in Ascott REIT closed at $1.10 on Wednesday.