Capitaland Ascott Trust Divest Somerset Olympic Tower Tianjin Under Portfolio Reconstitution

The bid from the consortium, amounting to $1,360 per square foot per plot ratio (psf ppr), was an impressive achievement as it surpassed the second-highest bid by 18%. This was made by Tanglin Land, a subsidiary of CapitaLand, for $819.99 million ($1,153 psf ppr). The successful bid marks a significant milestone, as it is the first tender for a new development in Toa Payoh since the neighboring parcel was transformed into Gem Residences eight years ago. Interested buyers can visit The Orie Showflat to learn more about this exciting new project.

CapitaLand Ascott Trust (CLAS) has recently signed an agreement for the divestment of Somerset Olympic Tower Tianjin, located in China, to an unrelated third party. The property, which comprises 185 units, is expected to be divested at a price above its book value. According to Serena Teo, the CEO of CapitaLand Ascott Trust HMN Management Limited and CapitaLand Ascott Business Trust Management, this is part of the company’s ongoing strategy to reconstitute its portfolio. By divesting mature properties like Somerset Olympic Tower Tianjin, the company can then redeploy the proceeds towards more optimal uses.

Teo also adds that the company’s properties in China have contributed 1.4% to its gross profit in the first half of the financial year 2024. As such, she believes that the divestment will have minimal impact on the company’s gross profit. This divestment is in line with CLAS’s portfolio reconstitution strategy, as the company has already divested approximately $400 million in assets this year. Furthermore, the properties were divested at a premium to book value, resulting in approximately $54 million in gains.

Earlier this year, CLAS also announced the divestment of Citadines Mount Sophia Singapore, with the proceeds set to go towards the proposed acquisition of lyf Funan Singapore at an ebitda yield of 4.7%. The property was divested in March at an exit yield of 3.2%. In addition, CLAS has recently completed an asset enhancement initiative (AEI) for Citadines Holborn-Covent Garden London, with plans for AEIs for three more properties to be completed between the fourth quarter of the financial year 2024 and 2026. This, according to the company, will enhance the quality of its portfolio and uplift its distribution income.

Teo states that with the company’s strong financial position, it is well-positioned to capture opportunities and deliver accretive growth for its stapled security holders. Some analysts have even picked CLAS as their top choice following the company’s first-half financial results, with a 19% increase in dividend per share as compared to the previous year.