Capitaland Ascott Trust Divests Citadines Karasuma Gojo Kyoto Jpy618 Bil
CapitaLand Ascott Trust (CLAS) has sold the Citadines Karasuma-Gojo Kyoto property in Japan for JPY6.18 billion ($53.1 million), according to a recent filing. The sale price represents an increase of 40.1% above the property’s book value, and the exit EBITDA yield was approximately 0.3%.
The buyer of the 124-unit hotel was Hilton Grand Vacations, a partner of the Hilton chain, and JLL facilitated the deal. The net proceeds from the divestment are JPY4.4 billion, and CLAS recognized a net gain of JPY0.9 billion.
CLAS CEO Serena Teo stated that the sale of Citadines Karasuma-Gojo Kyoto is in line with the REIT’s active portfolio reconstitution strategy. She explained that the property had reached the optimal stage of its lifecycle and that the proceeds from the sale will be used to invest in higher-yielding opportunities to further boost returns for securityholders.
Teo also emphasized that Japan remains a key market for CLAS, and the REIT will continue to look for ways to strengthen its portfolio in the country. In the first half of 2024, CLAS made some acquisitions, including the purchase of Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, and the full acquisition of Standard at Columbia, a student accommodation property in the US. These acquisitions will enhance the REIT’s income stream in the coming years.
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Following the sale of Citadines Karasuma-Gojo Kyoto, CLAS will have a portfolio of 29 properties in Japan, including serviced residences, hotels, rental housing, and student accommodation in key cities such as Tokyo, Osaka, Fukuoka, Hiroshima, and Sapporo. This divestment comes on the heels of the proposed acquisition of lyf Funan Singapore that 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. The REIT also has four more properties lined up for AEIs that are expected to be completed between the second half of 2024 and 2026. These initiatives will enable CLAS to capitalize on the demand for lodging, increase property values, and generate higher returns for investors.