CapitaLand Ascott Trust (CLAS) has acquired three freehold rental housing properties in Japan for 4 billion yen, or $34.2 million.
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 these assets will lead to a distribution per stapled security 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.
CLAS says that the expected net operating income entry yield of the acquisition is 4% in FY2025, which is significantly higher than the NOI exit yield of 0.4% from the divestment of Citadines Karasuma-Gojo Kyoto.
The three operating assets will contribute to CLAS’ distributable income immediately.
See also: JD.com unit, two other firms plan US$1 bil Singapore REIT: Reuters
On an annualised basis, the combined distributable income is expected to more than fully replace the income from the divested Citadines Karasuma-Gojo Kyoto.
“The acquisition demonstrates CLAS’ ability to reconstitute our portfolio by redeploying divestment proceeds into higher-yielding assets, further enhancing CLAS’ portfolio and the quality of our earnings," says Serena Teo, CEO of the manager.
The properties have an average lease terms of about two years and an average occupancy of about 97% and the acquisition strengthens the stable income stream and portfolio resilience of CLAS.
See also: How to pick a good REIT? These REIT managers share their views
"Meanwhile, our earlier acquisition of two hotels in Tokyo and Kanazawa in January 2025 positions us to benefit from the growing travel demand. This combination of stable and growth income sources is a key strength for CLAS," says Teo.
Following the acquisition, CLAS’ properties in Japan will account for 17.7% of its total portfolio value.
CLAS units closed at 88 cents on Aug 27, down 0.57% for the day and down 1.69% year to date.
