CapitaLand Investment Fund Buys $210M Shinjuku Tower as Tokyo Portfolio Grows

A private fund managed by CapitaLand Investment has acquired a Tokyo mixed-use complex in a deal valuing the property at over JPY 30 billion ($210 million), with the Singaporean firm seeking to reposition the asset as a serviced residence offering under the Citadines brand.

The purchase of the 22-storey hotel and residential tower in the Japanese capital’s buzzy Shinjuku ward comes as CapitaLand Ascott Residence Asia Fund II has received fresh capital commitments from new and existing institutional investors, Temasek-controlled CapitaLand Investment said Monday in a release.

Targeting $600 million in capital, the value-add CLARA II fund was announced in February of last year and boosted by a $75 million commitment from Amsterdam-based Bouwinvest Real Estate Investors. The latest commitments are expected to increase CapitaLand Investment’s funds under management by S$470 million ($365.6 million), according to the announcement.

“The additional capital commitments reinforce CLI’s reputation as a trusted steward and the continued strong investor interest in serviced residences, which have proven to be a resilient asset class with the ability to deliver attractive yields,” said Kevin Goh, lodging CEO at CapitaLand Investment.

Orix Management Ceases

The 1992-built tower, known as Hundred Stay Tokyo Shinjuku, underwent renovation in 2019 and features hotel, residential and ancillary office and retail components. The seller wasn’t disclosed, but a hotel management arm of Japanese property giant Orix issued a notice last week that it was ceasing operations of Hundred Stay at the end of August.

The hotel and residential sections are to be upgraded and converted into a 179-unit serviced residence managed by CapitaLand Investment’s Ascott lodging division. The rebranded property, Citadines Shinjuku Tower Tokyo, will open in phases from the second half of 2026, according to the announcement.

Located a two-minute walk from Okubo railway station, Citadines Shinjuku Tower Tokyo is CLARA II’s second Japan asset and third overall. The fund opened Lyf Bugis Singapore last August and Lyf Shibuya Tokyo in December, with the latter reaching more than 70 percent occupancy within three months of launch.

“Through our first lodging private fund, Ascott Serviced Residence Global Fund, we have built a strong track record of delivering alpha, with successful divestments of Lyf Ginza Tokyo and Somerset Shinagawa Tokyo at premiums above target returns,” said Mak Hoe Kit, managing director of lodging private equity funds at CapitaLand Investment.

The firm also sees an opportunity to bring the lodging fund strategy to Europe, where demand for living and hospitality assets in gateway cities continues to rise, Mak said.

Record Arrivals

The number of foreign visitors to Japan rose 28.5 percent year-on-year to a record 3.91 million in April, with 14.4 million visitors arriving in the first four months of 2025, up 24.5 percent, according to official statistics.

In Tokyo, revenue per available room in 2024 was 43 percent higher than pre-COVID levels in 2019, data provider STR said, and strong growth continued in February with RevPAR up 19 percent year-on-year.

Japan aims to nearly double tourist numbers to 60 million annually by 2030, with Prime Minister Shigeru Ishiba instructing cabinet ministers to devise plans for achieving the goal.