ASCOTT TO ACQUIRE ASIA INSURANCE BUILDING AND HOTEL ASIA FOR S$217.5 MILLION

The Ascott Group (Ascott) has signed conditional sale and purchase agreements with The Asia Life Assurance Society Limited to acquire two properties, the landmark Asia Insurance Building and Hotel Asia, as part of its expansion drive in Singapore.

The conditional agreement for Asia Insurance Building includes the land and building assets for a consideration of S$109.5 million. The conditional agreement for Hotel Asia includes the land and building assets as well as 100% of the issued share capital of the hotel management company, Hotel Asia Private Limited, for a total consideration of S$108 million (S$103.7 million for Hotel Asia and S$4.3 million for the management company).

The legal completion of the proposed acquisitions of the two properties is expected to be about three weeks from the signing of the conditional agreements. The acquisition of these two assets will enlarge The Ascott Group's portfolio of serviced residences in Singapore to a total of eight properties.

Asia Insurance Building, located at Finlayson Green, was built in the early 1950’s and was then a landmark building being the tallest in South East Asia. The 20-storey office building, which has a total gross floor area of about 13,900 square metres (about 150,000 sq ft), sits on a 999-year leasehold site with an area of about 950 square metres (about 10,200 sq ft). As for Hotel Asia, it is located along Scotts Road, near Singapore's shopping and entertainment belt. It has a potential gross floor area of about 14,000 square metres (about 150,700 sq ft). The building sits on a freehold site with a land area of over 3,300 square metres (about 35,900 sq ft).

Mr Lim Chin Beng, The Ascott Group’s Chairman said, “In recent years, the supply of high-end, good quality accommodation in Singapore has been reduced as the number of four and five-star hotels have been converted into condominiums. With the government’s efforts to attract more visitors to Singapore, the proposed acquisitions of Asia Insurance Building and Hotel Asia by Ascott will be timely to cater to the expected increase in demand for good quality accommodation for extended stay.”

Mr Liew Mun Leong, Ascott's Deputy Chairman, and President and CEO of its parent company CapitaLand Group said, "The Ascott Group's acquisitions will scale up Ascott's presence in Singapore where it is headquartered. We will restore the landmark Asia Insurance Building to its former glory. Given its historical significance, it is befitting to transform it into The Ascott Group’s flagship building. These acquisitions coincide with the overall growth in the Singapore market for hospitality services, as Singapore has embarked on measures to increase tourism receipts and to attract more long-stay visitors and expatriates. We will continue to maintain our leadership position in international serviced residences."

Mr Cameron Ong, Ascott's Managing Director and CEO said, "These two properties are situated in prime locations. Asia Insurance Building is in the heart of Singapore's Central Business District, and near Collyer Quay which will be redeveloped into a lifestyle hub with a mix of restaurants, shops and night spots. As for Hotel Asia, it commands a prime address along Scotts Road. It is an ideal site as it is in a quiet location and yet within walking distance to Orchard Road, Singapore's prime shopping and entertainment belt. Looking ahead, the Group intends to double its size in Singapore by 2010, from 800 units in six properties currently. Our global growth plan is to achieve 25,000 units by 2010."

The proposed acquisitions will not have any material impact on Ascott’s net tangible assets per share and earnings per share for the current financial year.