Divestment is part of the stapled group’s strategy to recycle capital and reconstitute its portfolio to enhance returns
CAPITALAND Ascott Trust (Clas) has agreed to divest its property in Tianjin, China, managers of the stapled group said on Tuesday (Oct 22).
The Somerset Olympic Tower Tianjin will be sold to an unrelated third party for an undisclosed price, although the managers noted that it is “above book value”, and that more details of the transaction will be provided upon its completion.
The divestment is part of the stapled group’s strategy to recycle capital and reconstitute its portfolio to enhance returns to its stapled securityholders, the managers said.
Serena Teo, chief executive officer of Clas’ managers, expects the divestment will have minimal impact on the stapled group’s gross profit.
She noted that Clas’ properties in China contributed 1.4 per cent to the stapled group’s total gross profits in the first half of 2024.
“We continually reconstitute Clas’ portfolio by divesting mature properties such as Somerset Olympic Tower Tianjin and redeploying the proceeds towards more optimal uses,” Teo added.
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The 30-storey mixed-development property opened in 1998 and is located in the Heping District of Tianjin. It comprises 185 serviced residence units and a three-storey retail podium.
Post-divestment, the stapled group will have four properties in China.
The managers expect the transaction to be completed in the second quarter of 2025.
Prior to Somerset Olympic Tower Tianjin, Clas had divested nearly S$400 million in assets in the year to date, unlocking about S$54 million in gains, they noted.
Stapled securities of Clas closed 1.1 per cent or S$0.01 lower at S$0.94 on Tuesday, before the announcement.
