Capitaland Ascott Trust Divests Citadines Karasuma Gojo Kyoto Jpy618 Bil

CapitaLand Ascott Trust (CLAS) announced that it has successfully divested Citadines Karasuma-Gojo Kyoto in Japan for JPY6.18 billion ($53.1 million). This transaction resulted in a net gain of JPY0.9 billion and net proceeds of JPY4.4 billion for the REIT. The 124-unit property was sold at a premium of 40.1% above book value with an exit ebitda yield of about 0.3%. CLAS has recognized the strong potential of the property and has decided to sell it to Hilton Grand Vacations, the vacation ownership partner of Hilton, through the assistance of JLL.

According to Serena Teo, CEO of the CLAS managers, this divestment is consistent with the REIT’s strategy of actively reconstituting its portfolio. She stated, “The mature property has reached the optimal stage of its lifecycle. We plan to redeploy the divestment proceeds into higher-yielding investments to further grow our returns to stapled securityholders.” She also emphasized the importance of Japan as a key market for CLAS and expressed the REIT’s continuous pursuit of opportunities to strengthen its portfolio in the country.

In the first half of 2024, CLAS successfully acquired two properties, Teriha Ocean Stage in Fukuoka, Japan and Standard at Columbia in the US. These acquisitions are expected to enhance the REIT’s income stream, as mentioned by Teo. After the divestment, CLAS will have 29 properties in its portfolio, which includes a mix of serviced residences, hotels, rental housing, and student accommodations in Japan’s prime cities, such as Tokyo, Osaka, Fukuoka, Hiroshima, and Sapporo.

This divestment announcement follows the recent proposed acquisition of lyf Funan Singapore. CLAS also completed asset enhancement initiatives (AEI) for four properties in the first half of 2024. Four more properties are in the pipeline for AEI, which are expected to be completed between the second half of 2024 and 2026. These initiatives will not only enhance the quality of CLAS’ portfolio but also improve its ability to capture the demand for lodging, increase its value, and drive higher returns.

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