Capitaland Ascott Trust Acquires Two Hotels Japan Jpy21 Billion
CapitaLand Ascott Trust (CLAS) has recently acquired two freehold limited-service hotels in Japan for approximately JPY21 billion ($178.5 million). The two hotels include the ibis Styles Tokyo Ginza, located in the bustling capital, and Chisun Budget Kanazawa Ekimae, situated in the historic city of Kanazawa. The acquisition was priced at a discounted rate of 8.3% compared to independent valuation.
Based on pro forma projections for FY2024, the addition of these two hotels will result in a distribution per stapled security (DPS) accretion of 1.6%. The blended net operating income (NOI) yield for the acquisition is estimated to be 4.3% in FY2024. To mitigate potential currency fluctuations, the purchase was financed through JPY-denominated debt and proceeds from the divestment of four properties in Japan.
The ibis Styles Tokyo Ginza is conveniently located in the heart of the city’s shopping and entertainment district. With 224 well-appointed units, guests have easy access to popular landmarks such as Ginza Six, a high-end retail mall, and the famous Uniqlo flagship store. The iconic Ginza Wako clock tower is also just a short walk away.
In addition, CLAS has also acquired the 392-unit Chisun Budget Kanazawa Ekimae in Kanazawa, a city renowned for its preserved traditional gardens, cultural icons, and historical attractions. Guests staying at this hotel can easily explore popular destinations such as the Kanazawa Castle, Kenrokuen Garden, as well as the geisha and samurai districts featuring architectural designs from Japan’s Edo period.
Including the recent acquisitions of ibis Styles Tokyo Ginza and Chisun Budget Kanazawa Ekimae, CLAS has completed investments totaling approximately $530 million in the past year. These acquisitions have yielded higher returns compared to CLAS’ divestments, which has enhanced the trust’s income distribution.
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The previous year also saw CLAS completing several other noteworthy acquisitions, including Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, as well as the remaining 10% stake in Standard at Columbia, a student accommodation property in the United States. In December 2024, CLAS also acquired lyf Funan Singapore.
Apart from these acquisitions, CLAS successfully completed over $500 million in divestments in 2024, resulting in a net gain of approximately $74 million.
CLAS’ CEO, Serena Teo, says, “This acquisition is part of our portfolio reconstitution strategy to enhance the quality of our portfolio and deliver stable returns to our Stapled Securityholders. The FY2024 NOI yield of these two hotels is significantly higher compared to the blended exit yield of approximately 2.0% for the four previous divestments in Japan. By promptly reinvesting the divestment proceeds into these higher-yielding assets, we have successfully replaced the income from the four divested properties.”
CLAS closed at 90 cents per unit on the day of the announcement.