In a significant strategic shift, CICT and its joint venture partners have divested the 299-unit Citadines Raffles Place serviced residence for $280 million, surpassing its previous valuation of $278.8 million as of the end of 2024. This transaction marks a pivotal moment for CICT, enabling it to realize a substantial capital gain while facilitating a realignment of its investment strategy. The divestment is expected to yield CICT approximately $37.8 million, reflecting an exit yield of about 3.6%, an indication of favorable market conditions for this asset.
Citadines Raffles Place, which began operations in February 2022, is part of the larger CapitaSpring integrated development located at 88 Market Street in Singapore’s Downtown Core. This prime location, coupled with the modern amenities offered by the serviced residence, has attracted a diverse clientele, contributing to its initial success.
However, the decision to divest is not a reflection of the asset’s performance but rather a strategic move by CICT to optimize its portfolio. By selling the asset, CICT aims to redeploy capital toward more DPU-accretive opportunities, which is a crucial consideration for any real estate investment trust focused on delivering value to its unitholders.
CICT’s ownership in the joint venture stands at 45%, shared with CapitaLand Development, which also holds a 45% stake, and Mitsubishi Estate Asia, which has a 10% share. This collaboration among major players in the real estate sector underscores the competitive dynamics of the market and the collaborative efforts to maximize returns on investment.
The successful sale of Citadines Raffles Place not only reinforces CICT’s proactive approach to portfolio management but also showcases the strength of its partnerships in navigating the complexities of the real estate landscape.
The completion of this transaction is anticipated by the second quarter of 2025, allowing sufficient time for all parties involved to finalize the necessary logistics and ensure a seamless transition. The divestment aligns with current market trends, where many property owners are reassessing their holdings in light of evolving consumer preferences and economic conditions.
For CICT, this sale represents an opportunity to reallocate resources effectively, enhancing the potential for future growth and income generation.
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News Source: Edgeprop
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