CapitaLand has divested three retail malls in Japan and an office building in Korea for a total consideration of $448.7 million.
The Japanese properties are La Park Mizue and Vivit Minami-Funabashi in Greater Tokyo, as well as CO-OP Kobe Nishinomiya Higashi in Greater Osaka. These were divested above valuation for a total of JPY 21.99 billion ($283.6 million).
In Korea, ICON Yeoksam in Seoul was divested for KRW 142.2 billion ($165.1 million), also above valuation, in August 2020.
CapitaLand held the office building through a private fund, Ascendas Korea Office Private Real Estate Investment Trust (REIT) 5. CapitaLand remains the asset manager of ICON Yeoksam and will continue to receive fee income
The move comes as part of the group’s ongoing portfolio reconstitution.
The divestments bring the total gross value of the divestments made by CapitaLand and its real estate investment trusts (REITs) to $3.02 billion, crossing its annual target of recycling $3 billion of capital.
As at Nov 30, CapitaLand and its REITs have invested over $3.30 billion into new assets.
The buyers of the divestments are unrelated third parties and the considerations were arrived at a willing-buyer and willing-seller basis.
In addition, CapitaLand has entered into a joint venture with Mitsui & Co. Real Estate to develop and operate a logistics project in Greater Tokyo, marking CapitaLand’s first foray into Japan’s logistics sector. CapitaLand will be the majority partner in the joint venture.
The development is close to Central Tokyo and easily accessible via the strategic Route 16 national highway.
The four-storey modern logistics facility with a gross floor area of about 24,000 square metres, will be completed in 4Q2022.
CapitaLand has been operating in both countries for almost 20 years. Following the divestment, CapitaLand will retain $3.8 billion of assets under management (AUM) in Japan and $2.0 billion of AUM in Korea.
“By paring down our exposure in Japan’s retail sector and leveraging our logistics experience in markets such as Singapore, Australia and the United Kingdom to expand into the new economy sector in Japan, we are responding swiftly to shifting market trends and consumer behaviours, positioning CapitaLand for future growth,” says Jason Leow, president of CapitaLand Group’s Singapore and International arm.
“The logistics sector in Japan presents significant opportunities for CapitaLand. The global pandemic has accelerated the growth of e-commerce and the logistics sector has been a prime beneficiary of this trend,” says CapitaLand International CEO Gerald Yong.
“Vacancy rates of the logistics sector in Greater Tokyo have reached a historical low of 0.4%. The logistics sector is set to continue its growth momentum as more customers transact online. We aim to achieve meaningful scale over time by leveraging Mitsui & Co. Real Estate Ltd’s local knowledge and access to business opportunities to grow our logistics portfolio in Japan,” Yong adds.
Shares in CapitaLand closed 1 cent lower or 0.3% down at $3.13 on Nov 30.