SINGAPORE (June 30): Ascott Residence Trust (ART) has recently announced seven acquisitions of assets in Australia and Japan worth $298 million.

In a June 26 report, UOB Kay Hian analysts Vikrant Pandey and Derek Chang downgrade ART to “hold” with an unchanged target price of $1.42 as the 2.9% accretion in distribution per unit is offset by the raised risk profile from the higher debt levels, after factoring in perpetual securities.

There is a 20 basis-point increase in required rate of return, write the analysts.

Perpetual securities worth $250 million were raised on June 23 to acquire the properties.

Separately, Frasers Hospitality Trust (FHT) has placed out 150 million units to strategic partner TCC to raise funds to buy Sofitel Sydney Wentworth.

The placement will raise up to $121.5 million to $123 million.

The net yield of Sofitel is about 5% after working in debt levels, and the acquisition is in line with FHT's strategy of building a quality portfolio of properties in prime locations.

The Sofitel acquisition follows FHT's purchase of the Sydney Hilton Hotel.

UOB Kay Hian maintains a “buy” on FHT with a target price of $1.02.

Ascott REIT is up 1 cent at $1.285 while Frasers Hospitality is up 0.5 cent at 85.5 cents.