CAPITALAND Ascott Trust (Clas) has divested Citadines Karasuma-Gojo Kyoto in Japan for about 6.2 billion yen (S$53.1 million).
On Wednesday (Oct 9), its managers said the sale price is 40.1 per cent above the 124-unit serviced residence’s book value as at end-2023.
It also represents an exit yield of about 0.3 per cent, based on Clas’ FY2023 earnings before interest, taxes, depreciation and amortisation (Ebitda).
The transaction has resulted in net proceeds of 4.4 billion yen, as well as a net gain of 900 million yen.
Serena Teo, the managers’ chief executive officer, said the divestment is in line with the trust’s active portfolio reconstitution strategy.
“The mature property has reached the optimal stage of its lifecycle. We plan to redeploy the divestment proceeds into higher-yielding investments to further grow our returns to stapled securityholders,” she added.
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Last week, Clas proposed to acquire lyf Funan Singapore at an agreed property value of S$263 million. This is expected to increase Clas’ total distribution by S$3.5 million, representing a distribution per stapled security accretion of 1.5 per cent on a FY2023 pro forma basis.
Teo noted that the proceeds from this divestment at an exit Ebitda yield of 3.2 per cent will go towards the proposed acquisition of lyf Funan Singapore at a higher yield of 4.7 per cent, thereby enhancing value for stapled securityholders.
She added that Japan remains a key market for Clas and is one of its “strongest-performing markets ”.
Clas’ properties in Japan experienced high demand in the second quarter of this year, said the stapled group. Revenue per available unit of Clas’ Japan properties rose 29 per cent on the year to 19,288 yen, while average daily rate continued to increase.
Post-divestment, Clas will have a portfolio of 29 properties in Japan, including serviced residences, hotels, rental housing and student accommodation properties.
Citadines Karasuma-Gojo Kyoto is a 10-storey freehold property located in the Shimogyo ward in the Kyoto prefecture.
While Clas’ managers only referred to the buyer of Citadines Karasuma-Gojo Kyoto as an “unrelated third party”, The Financial Times reported that vacation ownership and experiences company Hilton Grand Vacations announced that it had acquired the property.
The newly bought asset is the company’s first property in Kyoto and its third property in Japan. The acquisition is also part of Hilton Grand Vacations’ continued efforts to expand its presence in Japan.
Stapled securities of Clas ended on Tuesday 1 per cent or S$0.01 lower at S$0.955.
