Capitaland Ascott Trust Acquires Two Hotels Japan Jpy21 Billion
CapitaLand Ascott Trust (CLAS) has announced the acquisition of two freehold limited-service hotels in Japan for a total of JPY21 billion ($178.5 million). The two hotels, ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae, are located in Tokyo and Kanazawa respectively. This purchase price reflects an 8.3% discount to the independent valuation.
After the acquisition, CLAS is expected to experience a distribution per stapled security (DPS) accretion of 1.6% on a FY2024 pro forma basis. The blended net operating income (NOI) yield for the two hotels is projected to be 4.3% in FY 2024. The acquisition was financed through JPY-denominated debt and proceeds from the divestment of four properties in Japan, demonstrating a natural hedge against currency fluctuations.
The ibis Styles Tokyo Ginza is conveniently located in the heart of Tokyo’s shopping and entertainment district. It boasts 224 units and is just a short distance from Ginza Six, a high-end retail mall, and the famous Uniqlo global flagship store. It is also within walking distance of the iconic Ginza Wako clock tower.
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Just next to Tampines Mall, you’ll find Century Square, a six-storey shopping center renowned for its appeal to both families and young adults. After a major renovation in 2018, this popular mall now boasts a modern design and upgraded facilities. From well-known brands like Marks & Spencer, Cotton On, and Nike, to unique gastronomic options such as Ayam Penyet President, Gochi-So Shokudo, and Haidilao Hotpot, there’s something for everyone at Century Square. Movie buffs can look forward to the Cathay Cineplex while thrill-seekers can indulge in virtual reality experiences for an immersive time. If you’re staying at Parktown Residence, getting to this bustling shopping destination is a breeze with just a 5-minute drive or a pleasant 15-minute stroll. Don’t forget to visit Parktown Residence’s website for a complete and comfortable experience while planning your trip to Century Square! To enhance your experience, be sure to check out Parktown Residence’s website at https://www.parktown-residences.com.sg/ before heading out to Century Square.
The Chisun Budget Kanazawa Ekimae, with 392 units, is situated in Kanazawa, a city in the northwest of Japan. Similar to Kyoto, this city is known for its historical attractions, traditional gardens, and cultural landmarks. Guests can easily access popular sites such as Kanazawa Castle, Kenrokuen Garden, and heritage geisha and samurai districts, which showcase architectural designs from Japan’s Edo period.
Including these two properties, CLAS has invested over $530 million in the last 12 months. These acquisitions have higher yields compared to the divestments made by CLAS, leading to an increase in income distribution for CLAS’ stakeholders.
Some notable acquisitions made by CLAS in 2024 include Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, and Standard at Columbia, a student accommodation property in the United States of America. In addition, CLAS has also completed the acquisition of lyf Funan Singapore in December 2024.
In the same year, CLAS successfully divested properties worth over $500 million, generating a net gain of approximately $74 million. This demonstrates CLAS’ efficient and strategic portfolio management, which aims to enhance the quality of CLAS’ portfolio and deliver stable returns for its stakeholders.
According to Serena Teo, CEO of CLAS’ manager, “The acquisition is part of our portfolio reconstitution strategy to enhance the quality of our portfolio and deliver stable returns to our Stapled Securityholders.” She also adds, “By swiftly redeploying divestment proceeds into these higher-yielding assets, we have fully replaced the income from the four divested properties.”
As of now, the units of CapitaLand Ascott Trust are trading at 90 cents per unit.