CapitaLand's serviced residence unit Ascott Residence Trust (Reit) has bought a rental housing property in Fukuoka, Japan for 6.3 billion (S$78.4 million).
Infini Garden will provide Ascott with an EBITDA yield of 6.6 per cent, the Reit said on Friday. This is the ratio of Infini Garden's earnings before interest, tax, depreciation and amortisation to its total value including debt.
The 389-unit Infini Garden is located in Island City, near the upcoming Fukuoka Children's Hospital and a 25-minute drive to the central business district. It comprises two-, three- and four-bedroom apartments.
Ascott Reit is acquiring the property from The Ascott, which owns its manager Ascott Residence Trust Management, and ArcResidential Japan Investments.
The Fukuoka property is Ascott Reit's second acquisition after the Reit raised $253.7 million in a rights issue last December. In February, the Reit bought a property in Dalian, China.
Mr Lim Jit Poh, chairman of Ascott Residence Trust Management, said Infini Garden is the Reit's second property in Fukuoka.
"It will strengthen Ascott Reit's presence in Japan, the world's third largest economy. Japan's economy has rebounded sharply following the government's fiscal and monetary policy stimulus package," Mr Lim said.
Fukuoka, the business and transportation hub of Japan's Kyushu region, is "one of the few cities in Japan which has seen a modest growth in population over the years", Mr Lim added. The size of Fukuoka prefecture's economy is about US$196 billion.
Ascott Reit currently owns three serviced residences and 30 rental housing properties with about 1,900 apartment units across major cities in Japan including Tokyo, Fukuoka, Hiroshima, Kyoto, Saga, Sapporo and Sendai.