CapitaLand Ascott Trust (CLAS) has announced its intention to divest Citadines Central Shinjuku Tokyo for JPY25 billion (S$222.7 million), marking a 100% premium over the property’s book value. This strategic move is part of CLAS’s portfolio reconstitution strategy aimed at enhancing returns for Stapled Securityholders. The transaction, which is expected to complete by the fourth quarter of 2025, will unlock an estimated net gain after tax of JPY5.7 billion (S$50.8 million).
The divestment will allow CLAS to redeploy capital into more effective uses, such as repaying higher-interest debt, funding asset enhancement initiatives (AEIs), and reinvesting in higher-yielding properties. This approach is expected to improve CLAS’s financial flexibility, enabling it to distribute divestment gains or mitigate short-term impacts of AEIs or macroeconomic downturns. The proposal will be presented for approval at an Extraordinary General Meeting in September 2025.
Serena Teo, CEO of the Managers of CLAS, stated, “After evaluating the property’s age, substantial capital expenditure required, and the potential income loss during renovation, we are proposing to divest Citadines Central Shinjuku Tokyo at this opportune time. It will enhance our financial flexibility to further optimise our portfolio.”
Post-divestment, Japan is anticipated to contribute about 16% to CLAS’s gross profit. The country remains a key market for CLAS, with its rising urban migration and limited supply of prime housing options supporting a resilient income base. In the first half of 2025, CLAS’s rental housing portfolio in Japan maintained a stable income with an average occupancy rate of over 95%.
This divestment is part of CLAS’s ongoing strategy to recycle capital towards more optimal uses, having completed nine divestments totalling over S$500 million since 2024. The proceeds have been used to fund AEIs and invest in yield-accretive acquisitions, further strengthening CLAS’s portfolio.
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