Capitaland Ascott Trust Divests Citadines Karasuma Gojo Kyoto Jpy618 Bil
CapitaLand Ascott Trust (CLAS) has successfully divested its Citadines Karasuma-Gojo Kyoto property in Japan for JPY6.18 billion ($53.1 million), marking a significant milestone in its ongoing portfolio reorganization strategy. According to a recent filing, the 124-unit hotel was sold at a significant gain of 40.1% above book value and an exit EBITDA yield of approximately 0.3%. The divestment was brokered by JLL and the property was acquired by Hilton Grand Vacations, the vacation ownership partner of Hilton. Upon completion, CLAS has recorded a net gain of JPY0.9 billion, with net proceeds of JPY4.4 billion from the divestment.
Serena Teo, CEO of the CLAS managers, has expressed her satisfaction with the successful divestment, emphasizing that it is in line with the REIT’s ongoing portfolio reconstitution strategy. She added that the mature property has reached the optimal stage of its lifecycle and CLAS plans to utilize the divested proceeds to pursue higher-yielding investments to enhance returns for its stapled securityholders. Teo also highlighted the importance of Japan as a key market for CLAS, stating that it remains one of the REIT’s strongest performing markets. She further added that CLAS will continue to seek opportunities to strengthen its portfolio in Japan.
In the first half of 2020, CLAS completed the acquisition of Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, and fully acquired Standard at Columbia, a student accommodation property in the US, which are expected to strengthen the REIT’s income stream. Post-divestment of Citadines Karasuma-Gojo Kyoto, CLAS will now have a portfolio of 29 properties consisting of a mix of serviced residences, hotels, rental housing, and student accommodation properties in Japan. These properties are strategically located in gateway cities such as Tokyo, Osaka, Fukuoka, Hiroshima, and Sapporo.
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The divestment of Citadines Karasuma-Gojo Kyoto follows the recent news of the proposed acquisition of lyf Funan Singapore, which was announced last week. This showcases CLAS’s commitment to enhancing the quality of its portfolio. The REIT has also completed asset enhancement initiatives (AEI) for four properties in the first half of 2020 and has four more properties in the pipeline that are expected to be completed between the second half of 2020 and 2026. These AEIs will not only better position CLAS’s properties to capture lodging demand but also increase their value, leading to higher returns for its investors.