CapitaLand Investment has secured additional backing for its latest investment fund, and has secured a new asset it will purchase in Japan.
The fund, CapitaLand Ascott Residence Asia Fund II, or CLARA II, was set up with the intention of buying and repositioning real estate assets in major cities across Asia Pacific. Those real estate assets will then be expected to deliver a conversion or refurbishment that creates an extended stay hotel, to suit one of the group’s key brands.
Pooling funds to make larger investments
CLI itself holds a 20% stake in the fund, alongside other investment partners. With additional recent capital commitments to the fund , its managers now have SGD470 million more funds under management, with which to buy and turn around property assets.
The new property is a mixed use development in Tokyo’s Shinjuku district, which cost the fund a little over JNY30 billion. Acquired in an off-market transaction, it currently includes a hotel, apartments, offices and a retail element. The fund’s managers intend to upgrade the hotel and residential components, creating 179 serviced residences that will be managed by the group’s Ascott division.
Once complete, the property will have the accommodation element branded under the Citadines brand, as Citadines Shinjuku Tower Tokyo. There will be a mix of serviced apartments, from studios to three bedroom units, which will launch in phases, starting in the second half of 2026.
This is CLARA II’s third investment, and will join two properties already repositioned under the Lyf co-living brand. These are Lyf Shibuya Tokyo, and Lyf Bugis Singapore. The Lyf property in Japan got off to a strong start, achieving 70% occupancy within three months of its launch.
“The flex-hybrid model of our serviced residences, which caters to different lengths of stays, gives us a unique advantage,” said Kevin Goh, CEO of CLI Lodging. “Long stay guests provide income stability, while short-stay guests allow us to capture the upside and optimise revenue.”
A previous, successful fund, already invested in Japan, and has exited successfully following repositioning projects. Notably, in Japan the ASRGF fund launched two Tokyo developments, Lyf Ginza Tokyo, and also Somerset Shinagawa Tokyo, delivering returns that exceeded preset targets.
Mak Hoe Kit, managing director of lodging private equity funds at CapitaLand Investment, said he sees the potential to bring the fund model to Europe. “Demand for modern, sustainable living and hospitality assets in gateway cities like London, Paris, Berlin, Amsterdam and Barcelona continues to rise. Private capital is well-positioned to meet this demand.”
Exploiting the extended stay brand portfolio
The Ascott has a full suite of extended stay brands, when looking at upgrading and repositioning accommodation. These include Ascott, Citadines, Lyf, Oakwood and Somerset. Those brands have a strong presence across Asia Pacific, with 465 destinations including strong coverage in many Chinese cities.
In Europe, the Ascott family has more than 50 properties open, while it has more than 30 in MEA. One great area of opportunity for future extended stay market growth is in the Americas, where to date Ascott has just four properties.
