CapitaLand has divested three malls in Japan and an office building in South Korea for a total of $448.7 million, as part of its ongoing portfolio reconstitution strategy, it said yesterday in an exchange filing.
The real estate giant also announced it has made its first foray into Japan's logistics sector, entering into a joint venture with Mitsui & Co Real Estate, with CapitaLand as the majority partner, to develop and operate a logistics project in Greater Tokyo.
The divested properties in Japan are La Park Mizue and Vivit Minami-Funabashi in Greater Tokyo, as well as Co-op Kobe Nishinomiya Higashi in Greater Osaka, which were sold for a total of 21.99 billion yen (S$283.6 million).
It also divested Icon Yeoksam in Seoul for 142.2 billion won (S$165.1 million) in August. The office building was held 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 group said the divestments were done above valuation, and the buyers are unrelated third parties. Post-divestment, CapitaLand will retain $3.8 billion of assets under management (AUM) in Japan and $2 billion of AUM in South Korea.
With the divestments, the total gross value of divestments by CapitaLand and its Reits would be $3.02 billion, crossing its annual target of recycling $3 billion of capital.
CapitaLand and its Reits have invested more than $3.3 billion in new assets as at the end of last month.
"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," said Mr Jason Leow, president, Singapore and International, CapitaLand Group.
"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," he added.
Its new logistics venture in Japan is close to central Tokyo and is expected to be completed in the fourth quarter of 2022. The four-storey logistics facility will have a gross floor area of about 24,000 sq m.
Mr Gerald Yong, chief executive at CapitaLand International, said Japan's logistics sector presents significant opportunities for the group. "The global pandemic has accelerated the growth of e-commerce, and the logistics sector has been a prime beneficiary of this trend," he added.
"We aim to achieve meaningful scale over time by leveraging Mitsui & Co Real Estate's local knowledge and access to business opportunities to grow our logistics portfolio in Japan."
CapitaLand shares closed at $3.12 yesterday, down 0.3 per cent.
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