Capitaland Ascott Trust Divests Citadines Karasuma Gojo Kyoto Jpy618 Bil
CapitaLand Ascott Trust (CLAS) has successfully sold the 124-unit Citadines Karasuma-Gojo Kyoto in Japan for JPY6.18 billion ($53.1 million), marking a significant 40.1% increase above its book value. The sale was arranged by JLL and the property was acquired by Hilton Grand Vacations, a partner of global hotel chain Hilton. CLAS has recognized a net gain of JPY0.9 billion from the transaction, with net proceeds of JPY4.4 billion.
According to Serena Teo, CEO of the CLAS managers, the divestment of Citadines Karasuma-Gojo Kyoto aligns with the REIT’s active portfolio reconstitution strategy. She explains that the property has reached its optimal lifecycle and the proceeds from the sale will be reinvested into higher-yielding assets to further boost returns for its stapled securityholders. Japan remains a key market for CLAS, with a strong performance track record, and the REIT will continue to seek opportunities to strengthen its portfolio in the country.
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In the first half of 2024, CLAS acquired Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, and fully acquired Standard at Columbia, a student accommodation property in the US, to strengthen its income stream. Post-divestment, CLAS will be left with a portfolio of 29 properties in Japan, comprising a diverse mix of serviced residences, hotels, rental housing, and student accommodation in major cities such as Tokyo, Osaka, Fukuoka, Hiroshima, and Sapporo.
The recent divestment announcement follows the proposed acquisition of lyf Funan Singapore, which was announced last week. To further improve the quality of its portfolio, CLAS completed asset enhancement initiatives (AEIs) for four properties in the first half of 2024, with four more properties in the pipeline to be completed between the second half of 2024 and 2026. These AEIs are expected to enhance the properties’ value and appeal to cater to the increasing demand for lodging, ultimately driving higher returns for the REIT.