Ascott Reit’s portfolio performed well in the year despite uncertainty in 1H 2014 arising from the
ongoing presidential elections. Overall, RevPAU for our Indonesian properties grew 2% YoY from
S$101 to S$103. As part of our holistic asset enhancement programme, the serviced offices in Ascott
Jakarta were converted into six apartment units to meet the high demand for accommodation, thus
increasing total inventory from 198 to 204 units after the AEI was completed in 1Q 2014.
2015 Outlook
Fitch expects Indonesia’s GDP growth to increase 5.5% in 2015, mainly driven by both public and
private investments. In an unexpected turn of events, oil prices have fallen by more than 40% since
June 2014 and analysts have commented that prices are likely to remain low entering into 2015 due
to a global oversupply situation. Moody’s, the credit rating agency, anticipates that countries “battling
high inflation and large oil subsidy bills”, which includes Indonesia, are likely to benefit from it. Riding
on the falling oil prices, Indonesian President Joko Widodo has also taken the steps to cut fuel
subsidies in a bid to shift generous public spending from fuel consumption to economy-boosting
infrastructure projects. With a focused spending on infrastructure, this will likely help generate
demand for hospitality services.
Japan
35 Properties 2,490 Units
S$’million
Total Revenue (2014)
45.9
Total Gross Profit (2014)
28.1
Valuation as at 31 December 2014
569.1
Ascott Reit has four freehold serviced residences and 31 freehold rental housing properties in Japan.
This follows our acquisition of a rental housing property in Fukuoka and a hotel in Tokyo, which will
be managed by our Sponsor and converted into a Citadines-branded serviced residence in 2015.
The 79-unit Somerset Azabu East Tokyo, 160-unit Citadines Shinjuku Tokyo and the newly acquired
206-unit hotel have prime locations in central Tokyo with easy access to business and leisure
districts. The 124-unit Citadines Karasuma-Gojo Kyoto enjoys a premium address next to the Gojo
subway station and is close to entertainment, retail and food and beverage outlets. 19 of the rental
housing properties are centrally located in nine wards within Tokyo: Minato, Bunkyo, Meguro,
Nakano, Nerima, Setagaya, Shinjuku, Suginami and Taito. The other 12 rental housing properties are
located across six cities of Fukuoka, Sapporo, Kyoto, Hiroshima, Saga and Sendai. The rental
housing properties are conveniently located close to public transportation, supermarkets and other
lifestyle amenities.
The average length of stay at the serviced residence properties in Japan is more than one month.
Gross Rental Income
(S$’000)
Agreed
Property
Value
(S$’million)
FY 2014 FY 2013
Best Western Shinjuku Astina Hotel
1
2,205
–
95.2
Citadines Karasuma-Gojo Kyoto
5,441
5,350
48.2
Citadines Shinjuku Tokyo
8,162
7,811
98.1
Somerset Azabu East Tokyo
3,447
3,070
79.8
1 The property was acquired on 16 October 2014.
Pursuing Growth | 73
