CapitaLand Ascott Trust Issues New Stapled Securities to REIT Manager as Divestment Fee for Tokyo Asset Sale

Key Points Investors Must Know

• CapitaLand Ascott Trust (CLAS) has issued 1,179,514 new stapled securities to its REIT Manager.
• The securities were issued at S\$0.9275 per stapled security.
• The issuance is a payment for the Divestment Fee related to the sale of Citadines Central Shinjuku Tokyo.
• The Divestment Fee is set at 0.5% of the Enterprise Value of the divestment.
• After this transaction, the total number of stapled securities in issue is 3,826,122,478.
• The REIT Manager now holds 11,209,330 stapled securities, representing 0.292% of total securities in issue.
• The announcement comes with a reminder of investment risks and clarifies that stapled securities are not principal-guaranteed.

Detailed Analysis for Investors

On 15 October 2025, CapitaLand Ascott Trust Management Limited, acting as manager of CapitaLand Ascott Real Estate Investment Trust (REIT), and CapitaLand Ascott Business Trust Management Pte. Ltd., as trustee-manager of CapitaLand Ascott Business Trust, announced the issuance of new stapled securities as a form of payment for a divestment fee. This payment is directly linked to the recent sale of the Citadines Central Shinjuku Tokyo property.

The Divestment Fee is a contractual right of the REIT Manager under the REIT Trust Deed, which entitles them to receive payment equivalent to 0.5% of the Enterprise Value of the asset divested. In this case, the payment is being made not in cash, but by issuing new stapled securities at a price of S\$0.9275 per security. This method aligns with disclosures in the REIT Trust Deed, the REIT Prospectus, and the recent shareholder circular concerning the divestment.

This transaction increases the total stapled securities in circulation to 3,826,122,478, with the REIT Manager holding an updated total of 11,209,330 units (about 0.292% of all units). Importantly, this increment is relatively modest and unlikely to significantly dilute existing holders, but it does increase the manager’s direct influence in the Trust.

Potentially Price-Sensitive Implications

• Asset Sale Confirmation: The formal completion of the Tokyo property divestment confirms the monetization of a key asset, potentially affecting income streams and future distributions.
• Manager Incentivization: The payment of the divestment fee in securities, rather than cash, aligns management interests with security holders, but could also be seen as minor dilution.
• Change in Securities Outstanding: While the increase in total stapled securities is small, investors should monitor future similar transactions for cumulative impact.
• No Redemption Option: Investors are reminded that stapled securities cannot be redeemed with the manager and must be traded on the SGX-ST, which does not guarantee liquidity.

What Shareholders Should Watch

• Impact on Distribution Per Unit (DPU): The sale of Citadines Central Shinjuku Tokyo may affect the Trust’s earnings profile and future distributions. Investors should await further announcements on the redeployment of proceeds or changes in portfolio strategy.
• Manager’s Holdings: A gradual accumulation of stapled securities by the manager could be viewed as increased alignment or, if persistent, as creeping dilution.
• Market Reaction: The market’s response to asset sales and associated fees can be volatile, especially if investors perceive the transaction as accretive or dilutive.

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CapitaLand Ascott Trust Issues New Securities for Tokyo Property Sale – Is Manager Alignment or Dilution Ahead?

Disclaimer

This article is for informational purposes only and does not constitute investment advice, an offer or solicitation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making investment decisions. The value of stapled securities and any income derived from them may rise or fall, and there is no guarantee of principal or returns. Past performance is not indicative of future results.

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