A Singapore property trust sold a Kyoto hotel for S$53.1 million, nearly 40% above its book value, and plans to reinvest the S$8 million profit into higher-yielding assets.
KEY POINTS
IN SIMPLE TERMS
A Singapore company sold a hotel it owned in Japan for much more money than it was worth on paper. They made an S$8 million profit and now plan to use that money to buy other properties that could make them even more money.
WHY IT MATTERS
WHERE DO YOU STAND?
Do you think property trusts should regularly sell off well-performing assets if they can find higher-yielding alternatives elsewhere?
👍 👎 Vote ↓A Singapore company sold a hotel in Japan for a big profit, showing smart business moves in the property world.
On 9 October 2024, CapitaLand Ascott Trust (CLAS) said they sold a hotel in Japan.
The hotel is called Citadines Karasuma-Gojo Kyoto.
CLAS got S$53.1 million for the hotel.
This price was 40.1% more than what the hotel was worth on paper.
CLAS made S$8 million from this sale.
After paying costs, CLAS will have S$37.8 million left.
Ms. Serena Teo, the CEO of CLAS, explained why they sold the hotel.
She said, “We plan to redeploy the divestment proceeds into higher-yielding investments to further grow our returns to Stapled Securityholders.”
This means CLAS wants to use the money to buy things that make more money.
This sale is part of CLAS’s plan to make more money for its investors.
Some people might wonder why CLAS sold a hotel that was doing well.
But CLAS thinks they can make even more money with new investments.
Japan is still very important for CLAS.
After selling this hotel, CLAS still has 29 properties in Japan.
These include places for people to live and for students to stay.
| CLAS in Japan | Number |
|---|---|
| Properties before sale | 30 |
| Properties after sale | 29 |
CLAS’s business in Japan is doing very well.
In the second quarter of 2024, they made 29% more money per room than last year.
Each room made about JPY19,288 on average.
CLAS is always trying to make its properties better.
In the first half of 2024, they started improving four properties.
They plan to improve four more properties by 2026.
CLAS also bought new properties in 2024.
On 1 October 2024, CLAS said they want to buy lyf Funan Singapore.
This new property could make S$3.5 million more for CLAS’s investors.
Ms. Teo said, “The proposed acquisition of lyf Funan Singapore announced last week demonstrates CLAS’ ability to enhance value for Stapled Securityholders by using proceeds from our divestment.”
This shows how CLAS uses money from selling properties to buy new ones that make more money.
This sale shows that Singapore companies are making smart moves in the property market.
It’s not just about owning properties, but also knowing when to sell them for a good price.
This strategy helps companies like CLAS grow and make more money for their investors.
In other Singapore property news, CapitaLand sold half of ION Orchard for S$10.8 billion last month.
These big sales show that Singapore’s property market is very active.
CapitaLand Ascendas REIT also reported higher revenue earlier this year, showing strength in the property sector.
CLAS’s sale of the Kyoto hotel for a big profit shows they know how to make money in the property market.
Do you think property trusts should regularly sell off well-performing assets if they can find higher-yielding alternatives elsewhere?
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