CapitaLand Investment (CLI) announced, on June 9, that it has secured additional investor commitments for its value-add lodging private fund, CapitaLand Ascott Residence Asia Fund II (CLARA II). CLI holds about a 20% stake in the fund.
The statement adds that the fund and its co-investors acquired a prime mixed-use asset in Tokyo, Japan, for over 30 billion yen ($267.2 million). The 22-storey property, located in Shinjuku, is the fund’s third asset overall and second in Japan. The property currently comprises hotel, residential, as well as ancillary office and retail components.
CLI says the hotel and residential components will be upgraded and converted into a 179-unit serviced residence, which will be managed by Ascott. The property will be rebranded as Citadines Shinjuku Tower Tokyo and is set to be launched in phases from 2H2026. It is expected cater to corporate guests on extended stay as well as domestic and international travellers.
Following the acquisition, CLI’s funds under management (FUM) will increase by around $470 million.
“The additional capital commitments reinforce CLI’s reputation as a trusted steward and the continued strong investor interest in serviced residences, which have proven to be a resilient asset class with the ability to deliver attractive yields,” says Kevin Goh, CEO of CLI Lodging.
“With CLARA II, we are focused on refurbishment and conversion to maximise the value of their assets. Amid the global uncertainties, market dislocations in the hospitality sector have also created more opportunities for value-add and repositioning,” he adds.
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Mak Hoe Kit, managing director of CLI’s lodging private equity funds, notes that Japan is one of Asia’s “most developed and liquid real estate markets, supported by deep capital pools”.
“Leveraging our local expertise, we secured this off-market opportunity at an attractive entry price. CLARA II’s earlier assets — lyf Shibuya Tokyo and lyf Bugis Singapore — have been successfully repositioned and launched. Lyf Shibuya Tokyo achieved over 70% occupancy within three months of opening, demonstrating our ability to transform underutilised assets into high-performing lodging investments,” he says.
He adds that following the divestments of lyf Ginza Tokyo and Somerset Shinagawa Tokyo at premiums above target returns, CLI sees a “growing opportunity” and will bring its lodging fund strategy to Europe where there is a continued increase in demand for modern, sustainable living and hospitality assets in gateway cities like London, Paris, Berlin, Amsterdam and Barcelona
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“Private capital is well-positioned to meet this demand,” says Mak.
Shares in CLI closed at $2.56 on June 6.
