Ascendas Hospitality Trust acquired a portfolio of three hotels in Osaka, Japan for for ¥10.29 billion earlier this month.
The Trust will fund the purchase of the Hotel WBF Kitasemba West, the Hotel WBF Kitasemba East and the Hotel WBF Honmachi with debt. The acquisitions of the Hotel WBF Kitasemba West and the Hotel WBF Kitasemba East are expected to be complete by September 2018. The purchase of the final property Hotel WBF Hommachi is expected to be complete by January 2019.
“We are pleased to keep up our acquisition momentum after our maiden entry into Seoul recently. Osaka is a key financial center as well as a popular leisure destination, and inbound travel to the city has been on a strong growth trend. Domestic travel has also been healthy over recent years. We are confident that Osaka, as a gateway city, will continue to attract visitors across various segments. Osaka is a city we are familiar with and A-HTRUST’s acquisition of Sunroute Osaka Namba in 2014 has been highly successful, with the latest valuation more than double the purchase price. Given the strong fundamentals of its hospitality market, this is a city in which we are keen to deepen our presence," Tan Juay Hiang, CE of A-HTRUST, said in a statement.
Hotel management company White Bear Family will manage the properties. These will be the latest additions to the hotel manager's portfolio of 30 hotels operating in Japan, 11 of which operate in Osaka. “While upcoming supply may moderate growth, we believe that the hotel market in the city will be large enough to absorb this supply. Furthermore, the master leases will mitigate any downside risks to A-HTRUST. We are of the view that expanding A-HTRUST’s footprint in Japan will be beneficial to its stapled securityholders as the Japanese government continues to promote tourism as a key pillar of its economy," Tan said.
The hotels operate in the Honmachi district near the central business district, leisure destinations, the Dotonburi entertainment district, Osaka Castle and Honmachi Station. The 13-floor Hotel WBF Kitasemba West began operating in May 2018 with 168 guestrooms, following construction that also ended in May. Meanwhile, construction on its sister property Hotel WBF Kitasemba East ended in April 2018. The 13-floor hotel with 168 guestrooms began operating in June 2018. Construction on the 15-floor Hotel WBF Honmachi also ended in April 2018. The hotel opened in June 2018 with 182 guestrooms.