CapitaLand Ascott Trust (CLAS) has announced the acquisition of three freehold rental housing properties in Japan for a total of JPY 4 billion. Two of these properties are located in Osaka, namely Splendide Namba West and Pregio Esaka South, while the third, Pre de Cort Nishikyogoku, is situated in Kyoto.

On a pro forma basis for FY 2024, this acquisition is expected to result in a 0.3% increase in Distribution per Stapled Security (DPS). Funded by proceeds from the previous divestment of Citadines Karasuma-Gojo Kyoto in October 2024 and JPY-denominated debt, the acquisition is projected to yield a net operating income entry yield of 4% in FY 2025, dramatically surpassing the 0.4% exit yield from the prior asset.

These properties will begin contributing to CLAS’s distributable income immediately, with an annualized expectation to more than compensate for the income from the disposed asset.

CEO Serena Teo stated, “The acquisition demonstrates CLAS’ capability to reconfigure our portfolio by using the proceeds from divestments to invest in assets with better yields, enhancing the quality of our earnings. The properties, located in key urban areas and built around five years ago, possess high occupancy rates, significantly strengthening our income stability and portfolio resilience.”

This acquisition positions Japan as a key focus for CLAS, which will now have 33 assets in the country, encapsulating a mix of serviced residences, hotels, and rental properties, ultimately targeting an increase in living sector assets to 25-30% of their portfolio.