CapitaLand Ascott Trust (CLAS) acquires two freehold, limited-service hotels in Japan for JPY21 billion, expanding its portfolio in the country’s hospitality market.

CCapitaLand Ascott Trust (CLAS) has secured ownership of two freehold, limited-service hotels in Japan, with a combined value of JPY21 billion (approximately S$178.5 million).The properties include ibis Styles Tokyo Ginza, located in Tokyo, and Chisun Budget Kanazawa Ekimae, situated in Kanazawa, a popular domestic tourist destination. The acquisition was made at an 8.3% discount to its independent valuation.

On a pro forma basis for FY 2024, the deal is expected to generate a 1.6% increase in Distribution per Stapled Security (DPS). The blended net operating income (NOI) yield from this acquisition stands at 4.3% for FY 2024. To mitigate currency fluctuations, the deal was financed using JPY-denominated debt and funds from CLAS’ divestment of four Japanese properties.

In FY 2024, CLAS’ Japanese properties saw the highest performance among its key markets. Revenue per available unit for its serviced residences and hotels in Japan rose 37% year-on-year, reaching JPY23,987 in 4Q 2024. Following this acquisition, CLAS’ Japan portfolio now includes two serviced residences, four hotels, 23 rental housing units, and a student accommodation property.

Prime Locations to Tap Into Travel Demand The ibis Styles Tokyo Ginza is situated in the heart of Tokyo’s upscale shopping and entertainment area. The 224-room hotel is adjacent to the Ginza Six shopping mall and near the global Uniqlo flagship store. The iconic Ginza Wako clock tower is less than 10 minutes’ walk away. Guests can enjoy a wide variety of dining and shopping options in the area and have easy access to the subway with Higashi Ginza and Ginza stations, located within a six- to eight-minute walk.

Chisun Budget Kanazawa Ekimae, a 392-room hotel, is located in Kanazawa, northwest Japan. Known for its historical landmarks, traditional gardens, and Edo-period architecture, the city attracts both cultural tourists and food lovers, especially for its fresh seafood. The hotel is a 10-minute drive from the central business district and key event venues. It’s just a five-minute walk from Kanazawa Station, offering connections to major cities via the Shinkansen, Japan’s high-speed rail system, along with international flights to Seoul, Shanghai, and Taiwan.

Investing in High-Yield Assets With the addition of these two properties, CLAS has invested approximately S$530 million over the past year. These acquisitions, which offer higher yields than recent divestments, will contribute positively to CLAS’ income distribution.

In 2024, CLAS also made other key acquisitions, including Teriha Ocean Stage, a rental housing property in Fukuoka, Japan, in January, the remaining 10% stake in Standard at Columbia, a student accommodation in the U.S., in June, and lyf Funan Singapore in December. The trust also divested over S$500 million worth of assets, unlocking around S$74 million in net gains.

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