CAPITALAND Ascott Trust : HMN 0% is divesting three hotels in Osaka, Japan to an unrelated third party for a total of 10.7 billion yen (S$100.2 million), as part of its ongoing portfolio reconstitution strategy.

The properties are Hotel WBF Honmachi, Hotel WBF Kitasemba East and Hotel WBF Kitasemba West, it disclosed in a bourse filing on Sunday (Dec 17) morning.

The divestments will be at about 15 per cent above book value, and are expected to be completed in Q1 2024, CapitaLand Ascott Trust said. They are expected to raise net proceeds of about 3.9 billion yen, and the trust will recognise a net gain of 1.1 billion yen.

The sale of these properties, which are located outside Osaka’s prime districts, enables CapitaLand Ascott Trust to redeploy capital to assets and/or asset enhancement initiatives that can generate stronger yields, which will uplift its overall portfolio value, said Serena Teo, chief executive officer of its managers.

Post-divestment, it will have about 30 properties comprising serviced residences, hotels, rental housing and student accommodation properties in gateway cities in Japan, such as Tokyo, Fukuoka and Sapporo.

The country remains an attractive market for CapitaLand Ascott Trust, Teo said, noting strong tourism and population growth in gateway cities.

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“The overall positive demand-supply dynamics bode well for our portfolio of hospitality and longer-stay assets in Japan,” she added.

The counter closed at S$0.97 on Friday, down S$0.025 or 2.5 per cent.