CapitaLand Ascott Trust (CLAS) has acquired three freehold rental housing properties in Japan for a total of JPY4 billion (S$34.2 million). Two of the rental housing properties, Splendide Namba West and Pregio Esaka South, are 5lio reconstitution strategy, the acquisition was funded by proceeds from CLAS’ divestment of Citadines Karasuma-Gojo Kyoto in October 2024 and JPY-denominated debt.
The expected net operating income (NOI) entry yield of the acquisition is 4% in FY 2025. This is significantly higher than the NOI exit yield of 0.4% from the divestment of Citadines Karasuma-Gojo Kyoto. The three operating assets will contribute to CLAS’ distributable income immediately. On an annualised basis, the combined distributable income is expected to more than fully replace the income from the divested Citadines Karasuma-Gojo Kyoto.
Ms Serena Teo, Chief Executive Officer of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management Pte. Ltd. (the Managers of CLAS), said: “The acquisition demonstrates CLAS’ ability to reconstitute our portfolio by redeploying divestment proceeds into higher-yielding assets, further enhancing CLAS’ portfolio and the quality of our earnings. Built about five years ago, the three rental housing properties are located in prime areas of key gateway cities with expanding economic opportunities. With average lease terms of about two years and an average occupancy of about 97%, the acquisition strengthens our stable income stream and portfolio resilience. Meanwhile, our earlier acquisition of two hotels in Tokyo and Kanazawa in January 2025 positions us to benefit from the growing travel demand. This combination of stable and growth income sources is a key strength for CLAS.”
“Japan is one of our key markets. Post-acquisition, CLAS’ properties in Japan accounts for 17.7% of our total portfolio value, enabling us to better capitalise on the strong lodging demand in the country, while maintaining a geographically diverse portfolio. We remain focused on our three-pronged strategy: unlocking value through divestments, investing in yield-accretive opportunities, and uplifting portfolio quality through well-timed asset enhancement initiatives (AEIs), to deliver steady long-term returns to our Stapled Securityholders,” added Ms Teo.
