Singapore-listed Ascendas Hospitality Trust (A-HTRUST) announced on Friday it has entered into a sale and purchase agreement with pan-Asian hotel operator Park Hotel Group to acquire the Park Hotel Clarke Quay for a consideration of S$300 million (US$242 million). Subsequent to the transaction, Park Hotel Group - co-owned by Hong Kong billionaire Law Kar Po - will lease and operate the Singapore hotel for an initial term of 10 years.

The 336-room Park Hotel Clarke Quay was built in 2006 as a greenfield project and opened for business in 2009. Real estate consultant Colliers International had valued the hotel at S$308 million on March 31 2013. The acquisition will increase the size of A-HTRUST by 29.1% to S$1.4 billion. It had raised S$459 million (US$369 million) via an IPO in July of last year and since seen its shares gain nearly 16.5%. The stock traded at S$1.025 per share on Monday morning, up 0.49% from the last close.

In a press statement, Allen Law, CEO of Park Hotel Group, says: "Park Hotel Clarke Quay's strategic location, superior brand positioning, and efficient management have resulted in a strong operational performance. The sale underpins the strong investor demand and appeal that exists for quality assets with strong stabilized cash flow."

The hotel is located in Singapore's Clarke Quay area, situated along the bank of the Singapore River and nearby Robertson Quay, the central business district, Marina Bay and Chinatown. It is in close proximity to the Clark Quay MRT station and the future Fort Canning MRT station.

Tan Juay Hiang, CEO of A-HTRUST added in a separate statement: "We are excited to add Park Hotel Clarke Quay, a high quality and award-winning hotel, to A-HTRUST's staple of properties. This marks our first foray into the Singapore hospitality market as we capitalize on the continued growth of Singapore's tourism industry."

The trust further announced it will fund the acquisition "through a combination of debt and equity [with details] expected to be issued to the Stapled Securityholders in due course."

Annual room rates in Singapore grew at a compound annual growth rate (CAGR) of 11% between 2009 and 2012, amid stable occupancy trends. Visitor arrivals in 2012 were estimated at 14.4 million, an increase of 9.3% from 2011. The Singapore Tourism Board aims to attract 17 million visitors by 2015.

Park Hotel Group owns and operates eight hotels in three countries and six cities with access to 2,600 rooms. Group owner Law's estimated net worth jumped to US$2.6 billion in 2013, according to Forbes' Hong Kong 50's Richest List.