Current location site: Global

Singapore, 27 August 2025 – CapitaLand Ascott Trust (CLAS) has acquired three freehold rental housing properties in Japan for a total of JPY4 billion (S$34.2 million^[1]).  Two of the rental housing properties, Splendide Namba West and Pregio Esaka South, are in Osaka, while the third, Pre de Cort Nishikyogoku, is in Kyoto.

On a FY 2024 pro forma basis, the acquisition of the three rental housing properties has a Distribution per Stapled Security (DPS) accretion of 0.3%.  In line with CLAS’ portfolio reconstitution strategy, the acquisition was funded by proceeds from CLAS’ divestment of Citadines Karasuma-Gojo Kyoto in October 2024 and JPY-denominated debt.

The expected net operating income (NOI) entry yield of the acquisition is 4% in FY 2025.  This is significantly higher than the NOI exit yield of 0.4%^[2] from the divestment of Citadines Karasuma-Gojo Kyoto.  The three operating assets will contribute to CLAS’ distributable income immediately.  On an annualised basis, the combined distributable income is expected to more than fully replace the income from the divested Citadines Karasuma-Gojo Kyoto.

Post-acquisition, CLAS will have 33 assets^[4] in Japan, comprising two serviced residences, four hotels, 26 rental housing properties and a student accommodation property.  Its properties in the living sector such as rental housing and student accommodation account for about 17% of CLAS’ total portfolio value.  In the medium term, CLAS aims to increase its allocation towards living sector assets to about 25-30%, with the remaining 70-75% to serviced residences and hotels.

Expanding economic opportunities in Osaka and Kyoto continue to attract young professionals, students and expatriates from Japan’s suburbs and outside the country.  For example, Osaka’s population grew 1.8% between 2019 and 2024, despite the pandemic^[5].  Rents in Osaka and Kyoto have also been trending upwards for the past decade and are expected to rise between 10% to 15%^[6] over the next five years, supported by favourable demand-supply dynamics.

Enhancing CLAS’ portfolio in Japan
The acquisition of three rental housing properties follows CLAS’ acquisition of ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae in January 2025 for a total of JPY21 billion (S$178.5 million).  On a FY 2024 pro forma basis, the acquisition of the two hotels has a DPS accretion of 1.6%.  The blended NOI yield of the acquisition is 4.3% in FY 2024.  The acquisition was funded by JPY-denominated debt and divestment proceeds as part of CLAS’ portfolio reconstitution strategy.

On 29 July 2025, CLAS announced an AEI for Sotetsu Grand Fresa Osaka-Namba to uplift the hotel’s value and profitability.  The AEI is scheduled to be carried out and completed in 2026.

On 31 July 2025, CLAS proposed to divest Citadines Central Shinjuku Tokyo for JPY25 billion (S$222.7 million).  The divestment will unlock a net gain after tax of JPY5.7 billion (S$50.8 million) and generate net proceeds of JPY21 billion (S$187.4 million).  CLAS can redeploy the capital into more effective uses such as repaying higher-interest debt, funding AEIs, reinvesting in higher-yielding properties and/or for general corporate purposes.  CLAS will seek Stapled Securityholders’ approval for the divestment at an Extraordinary General Meeting scheduled for September 2025.  The transaction is expected to be completed by 4Q 2025.

^{NOTES
[1]  Based on an exchange rate of JPY1 to S$0.008634 unless stated otherwise.
[2]  Based on FY 2023 NOI.
[3]  As of June 2025.
[4]  Includes Citadines Central Shinjuku Tokyo as the proposed divestment is subject to Stapled Securityholders’ approval and is expected to be completed in 4Q 2025.
[5] Savills: Osaka Residential Markets, February 2025
[6] Sumitomo Mitsui Trust Research Institute report, January 2025.}