Capitaland Ascott Trust Divests Citadines Karasuma Gojo Kyoto Jpy618 Bil
CapitaLand Ascott Trust (CLAS) has recently sold its property, Citadines Karasuma-Gojo Kyoto in Japan, for JPY6.18 billion ($53.1 million). According to the filing, the 124-unit property was divested at a considerable value of 40.1% above book value at an exit ebitda yield of approximately 0.3%.
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The buyer of the hotel is Hilton Grand Vacations, the vacation ownership partner of Hilton, with JLL facilitating the deal. CLAS has received net proceeds of JPY4.4 billion from the divestment and has recorded a net gain of JPY0.9 billion.
CLAS’s CEO, Serena Teo, states that the sale of Citadines Karasuma-Gojo Kyoto aligns with the REIT’s active portfolio reconstitution strategy. She explains, “The mature property has reached its optimal stage in its lifecycle. We plan to reinvest the divestment proceeds in higher-yielding investments to further increase the returns for our stapled securityholders.”
Teo adds that Japan is a crucial market for CLAS and one of its best-performing markets. The REIT continues to look for opportunities to strengthen its portfolio in Japan. In the first half of 2024, CLAS has acquired Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, and completed the full acquisition of Standard at Columbia, a student accommodation property in the US. These acquisitions are expected to enhance the REIT’s income stream.
After the sale, CLAS will have a portfolio of 29 properties, consisting of serviced residences, hotels, rental housing, and student accommodation properties in Japan. These properties are located in key cities like Tokyo, Osaka, Fukuoka, Hiroshima, and Sapporo.
Last week, CLAS announced the acquisition of lyf Funan Singapore, further boosting its portfolio. To improve the quality of its portfolio, CLAS has completed asset enhancement initiatives (AEI) for four properties in the first half of 2024. The REIT has four additional properties in its AEI pipeline, which are expected to complete between the second half of 2024 and 2026. These AEIs will position CLAS’s properties better to cater to the demand for lodging, increase their value, and drive higher returns.