CapitaLand Ascott Trust (CLAS) has announced the acquisition of three freehold rental housing properties in Japan for JPY4b($34.2m). The properties, located in Osaka and Kyoto, are expected to bolster CLAS’ stable income stream and portfolio resilience. This strategic move aligns with CLAS’ portfolio reconstitution strategy, funded by the divestment of Citadines Karasuma-Gojo Kyoto and JPY-denominated debt.
The acquisition is projected to yield a net operating income (NOI) entry yield of 4% in FY 2025, significantly higher than the 0.4% NOI exit yield from the divested property. Serena Teo, CEO of CapitaLand Ascott Trust Management Limited, stated, “The acquisition demonstrates CLAS’ ability to reconstitute our portfolio by redeploying divestment proceeds into higher-yielding assets, further enhancing CLAS’ portfolio and the quality of our earnings.”
The properties, built about five years ago, boast an average occupancy rate of 97% and are located in prime areas with expanding economic opportunities. Post-acquisition, CLAS’ Japanese properties will account for 17.7% of its total portfolio value, enabling the trust to capitalise on Japan’s strong lodging demand whilst maintaining a geographically diverse portfolio.
CLAS aims to increase its allocation towards living sector assets to 25% to 30% in the medium term. The acquisition follows CLAS’ earlier purchase of two hotels in Tokyo and Kanazawa, positioning the trust to benefit from growing travel demand.
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