CapitaLand expands lodging fund with Tokyo mixed-use acquisition

This is the fund’s third acquisition and second in Japan.

CapitaLand Investment (CLI) has secured new capital from institutional investors for its private lodging fund, CapitaLand Ascott Residence Asia Fund II (CLARA II), bringing in around $470m in additional funds under management.

CLARA II and its co-investors have acquired a mixed-use property in Tokyo for over JPY30b.

This is the fund’s third acquisition and second in Japan. CLI holds a 20% stake in the fund.

Kevin Goh, CEO of CLI Lodging, said demand for serviced residences remains strong due to their resilience and yield potential. “The flex-hybrid model of our serviced residences, which caters to different lengths of stays, gives us a unique advantage."

Goh added that the company is targeting value-add opportunities through asset conversions and refurbishments, capitalising on market dislocations in the hospitality sector.

The fund’s previous assets include lyf Shibuya Tokyo and lyf Bugis Singapore. The Tokyo property reached over 70% occupancy within three months of launch.

Mak Hoe Kit, managing director of Lodging Private Equity Funds, said the Tokyo deal was secured off-market at an attractive price.

He added that CLI’s first lodging fund, Ascott Serviced Residence Global Fund (ASRGF), has delivered strong returns, with divestments of lyf Ginza Tokyo and Somerset Shinagawa Tokyo completed at premiums above target.

CLI is now looking to replicate its strategy in Europe, targeting cities such as London, Paris, Berlin, Amsterdam and Barcelona.