CAPITALAND Ascott Trust (Clas) has sold a rental housing asset in Japan to Goldman Sachs for 12.7 billion yen (S$110 million).
Real estate intelligence firm Mingtiandi on Friday (Nov 22) reported that the deal – completed in October this year – is part of Goldman Sach’s strategy to focus on Japan’s residential sector amid favourable supply and demand dynamics.
Infini Garden was sold at a 55 per cent premium to book value, said Clas’ managers in the trust’s third-quarter business update. The exit yield of the property stood at 3.4 per cent, and Clas booked a net gain of S$5 million from the sale.
As at Dec 31, 2023, the property was valued at 8.2 billion yen.
The 389-unit property is located in Fukuoka, near a children’s hospital. It is a 25-minute drive to the city’s Central Business District. With a net lettable area of 360,806 square feet, Infini Garden comprises two, three and four-bedroom apartments.
Clas acquired the property in 2014 from The Ascott Limited and ArcResidential Japan Investments for 6.3 billion yen.
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In October, Clas’ managers also agreed to sell the Somerset Olympic Tower Tianjin serviced residence in China for an undisclosed price to an unrelated third party, though they noted that the deal is “above book value”. The transaction is expected to be completed in the second quarter of 2025.
The divestment is part of the stapled group’s strategy to recycle capital and reconstitute its portfolio to enhance returns to its stapled securityholders, said the managers.
In the same month, it also completed the sale of the Citadines Karasuma-Gojo serviced residence for about 6.2 billion yen.
In the year to date, Clas has completed more than S$500 million in divestments – all at premium to book value – and has unlocked some S$60 million in net gains.
As at end-September, Clas’ portfolio comprised 101 properties – down from 103 properties the year before – with total assets worth S$8.5 billion.
Long-term strategy
The Business Times earlier this month reported that the flurry of divestments points to the lodging trust’s long-term strategy.
Properties such as Citadines Karasuma-Gojo Kyoto are mature and have “reached the optimal stage of its life cycle”, said Serena Teo, chief executive of Clas’ managers.
The stapled group said it will continue to divest mature properties and reinvest the proceeds into more optimal uses. This includes investing in higher-yielding properties, funding asset upgrades, as well as paying down debts with higher interest rates.
As at end-September, Clas’ gearing stood at 38.3 per cent – giving it a debt headroom of some S$1.9 billion. It also has some S$1.4 billion in total available funds, comprising S$535 million in cash on hand and S$864 million in available credit facilities.
Stapled securities of Clas were trading down 0.6 per cent or S$0.005 at S$0.88 before the midday trading break on Friday.