The 124-unit property was divested at 40.1% above book value at an exit ebitda yield of about 0.3%.

CapitaLand Ascott Trust (CLAS) has divested Citadines Karasuma-Gojo Kyoto in Japan to New York Stock Exchange-listed Hilton Grand Vacations for JPY6.18 billion ($53.1 million).

The 124-unit property was divested at 40.1% above book value at an exit ebitda yield of about 0.3%, it says in a filing.

Net proceeds of the divestment are JPY4.4 billion. CLAS has recognised a net gain of JPY0.9 billion.

Hilton is renovating the property in 2Q2025, expecting the project to complete in 1Q2026. JLL assisted in brokering the transaction.

CEO of the CLAS managers Serena Teo says the divestment of Citadines Karasuma-Gojo Kyoto is in line with its 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. 

“Japan remains a key market for CLAS and is one of our strongest performing markets. We continue to seek opportunities to strengthen our portfolio in Japan,” she adds.

In 1H2024, CLAS completed the acquisition of Teriha Ocean Stage, a rental housing property in Fukuoka, Japan and fully acquired Standard at Columbia, a student accommodation property in the US. The acquisitions will strengthen the REIT’s income stream, says Teo.

Post-divestment, CLAS will have a portfolio of 29 properties comprising a mix of serviced residences, hotels, rental housing and student accommodation properties in Japan. These properties are situated in gateway cities such as Tokyo, Osaka, Fukuoka, Hiroshima and Sapporo.

The divestment announcement follows the proposed acquisition of lyf Funan Singapore announced last week. 

To further enhance the quality of CLAS’ portfolio, it completed asset enhancement initiatives (AEI) for four properties in 1H2024. CLAS has four additional properties in its AEI pipeline that are expected to complete between 2H2024 and 2026. These AEIs will better position CLAS’ properties to capture lodging demand, raise their value and drive higher returns.

Units in CLAS closed 1 cent lower or 1% down on Oct 8 at 95.5 cents.