Singapore-based CapitaLand Ascott Trust (CLAS) has expanded its presence in Japan with the acquisition of two freehold limited-service hotels for a total of Y21bn ($178.5m).

The purchase includes the ibis Styles Tokyo Ginza in Tokyo and Chisun Budget Kanazawa Ekimae in Kanazawa.

CapitaLand Ascott Trust Management and CapitaLand Ascott Business Trust Management CEO Serena Teo said: “The acquisition is part of our portfolio reconstitution strategy to enhance the quality of our portfolio and deliver stable returns to our stapled securityholders.

“By swiftly redeploying divestment proceeds into these higher-yielding assets, we have fully replaced the income from the four divested properties.”

ibis Styles Tokyo Ginza offers 224 units and is situated adjacent to several landmarks and high-end retail spaces.

Chisun Budget Kanazawa Ekimae features 392 units and is in close vicinity to various notable attractions and transport links.

On a pro forma basis for FY 2024, the acquisition of the two hotels is expected to result in a 1.6% increase in distribution per stapled security (DPS).  

The combined net operating income (NOI) yield of the acquisition is projected at 4.3% for the same period.

With the new acquisitions, CLAS's Japanese portfolio includes two serviced residences, four hotels, 23 rental housing properties, and a student accommodation property.

Including the latest deals, CLAS invested approximately S$530m ($391m) over the past year, focusing on higher-yield acquisitions compared to its divestments, the company release added.

In March 2024, CLAS divested three hotel properties to real estate investment company Axe Management Partners for Y10.7bn.