- CapitaLand Ascott Trust has announced the proposed divestment of Citadines Central Shinjuku Tokyo – The divestment consideration of JPY25.0b (S$222.7m) represents a 40.4% premium to the average of two independent valuations of JPY18.1b (S$161.2m) and JPY17.5b (S$155.9m) as at 10 Jul 2025. This translates to an exit EBITDA yield of 3.2% (based on FY24 EBITDA) and an estimated net gain after tax of JPY5.7b (S$50.8m).
- - Read this at SGinvestors.io -
Rationale for divestment.
- The asset to be divested is a mature property that requires substantial CAPEX and temporary closure should CapitaLand Ascott Trust wish to enhance the property. By divesting the proceeds, the trust can instead redeploy the proceeds more effectively into other uses. Management shared that it sees opportunities in the living sector in Japan, particularly in rental housing.
- - Read this at SGinvestors.io -
- Assuming the net proceeds are used to repay debt, FY24 DPS would have been 1% higher at 6.16 Singapore cents on a pro forma basis. Meanwhile, aggregate leverage is expected to improve 1.8 percentage points (ppt) from 39.6% to 37.8% as at 30 Jun 2025. Management guided that the cost of debt for this year is likely to remain stable at around 2.9%, and is unlikely to improve significantly given that the divestment is only expected to be completed in 4Q25.
Maintain fair value estimate of S$1.02 and reiterate BUY rating.
- Read more at SGinvestors.io.
