SINGAPORE: CapitaLand has divested three retail malls in Japan and an office building in Korea for a total of S$448.7million as part of its ongoing portfolio reconstitution strategy.
The buyers are unrelated third parties. The agreed value of the properties was arrived on a willing-buyer and willing-seller basis.
In Japan, CapitaLand has divested La Park Mizue and Vivit Minami-Funabashi in Greater Tokyo, as well as CO-OP Kobe Nishinomiya Higashi in Greater Osaka above valuation for a total of JPY 21.99 billion (S$283.6 million).
In August 2020, CapitaLand also divested ICON Yeoksam in Seoul above valuation for KRW 142.2 billion (S$165.1 million). CapitaLand held the office building through a private fund, Ascendas Korea Office Private Real Estate Investment Trust (REIT).
CapitaLand remains the asset manager of ICON Yeoksam and will continue to receive fee income. With these divestments in Japan and Korea, the total gross value of the divestments by CapitaLand and its real estate investment trusts (REIT) would be S$3.02 billion, crossing its annual target of recycling S$3 billion of capital.
As at 30 November 2020, CapitaLand and its REITs have invested more than S$3.30 billion into new assets.
CapitaLand has also entered into a joint venture with Mitsui & Co. Real Estate Ltd, with CapitaLand as the majority partner, to develop and operate a logistics project in Greater Tokyo.
This marks CapitaLand’s first foray into Japan’s logistics sector. The development is close to Central Tokyo and easily accessible via the strategic Route 16 national highway. When completed in 4Q2022, the four-storey modern logistics facility will have a gross floor area of about 24,000 square metres.
Mr Jason Leow, President, Singapore & International, CapitaLand Group, said: “The divestment of these mature malls and office asset is part of CapitaLand’s capital recycling strategy to unlock value by reinvesting the capital into new growth opportunities such as the logistics sector in Japan.
“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 forfuture growth.
“Despite COVID-19, we have crossed our capital recycling target of S$3 billion and remain focused on divesting non-core assets opportunistically. CapitaLand will continue to actively reconstitute and optimize our portfolio to deliver long-term value for our stakeholders.”
Mr Gerald Yong, Chief Executive Officer, CapitaLand International, said: “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.
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 overtime by leveraging Mitsui & Co. Real Estate Ltd’s local knowledge and access to business opportunities to grow our logistics portfolio in Japan.”
Mr Yoshiyasu Furukawa, President and CEO of Mitsui & Co. Real Estate Ltd, said: “We are pleased to partner with CapitaLand on their first logistics project in Japan. The combination of Mitsui & Co. Real Estate Ltd’s extensive experience in Japan’s logistics sector and CapitaLand’s position as one of Asia’s largest diversified real estate groups is a winning partnership. We aim to deliver a modern and quality logistics development in 4Q 2022 and deepen our collaboration in the future.”
CapitaLand has been operating in Japan and Korea for close to 20 years. Post divestment, CapitaLand will retainS$3.8billionofassetsunder management (AUM) in Japan and S$2.0 billion of AUM in Korea.