CFA Society Singapore
SINGAPORE (Oct 1): Thakral Corporation says it has acquired a hotel and two office properties in Osaka, Japan, valued at JPY5.46 billion ($66 million) in total.
The group’s move comes as part of its overall strategy to broaden its asset & earnings base in order to capitalise on Japan’s strong economic fundamentals and tourism boom, according to Thakral in a press release on Monday.
Its investments in two new properties, namely Hotel White Bear Family (WBF) Namba Motomachi and Utsuo East Building, have been made through Thakral’s new holding structure in Japan via TJPP, a pooled investment vehicle, and its indirect subsidiary SJ Property Investments, which is held by TJPP. Thakral will hold about 50% interest in TJPP.
The third building, Legal Itachibori Building, is being acquired from the group’s current pooled investment vehicle that has a different shareholding pattern from the new pooled structured.
According to Thakral, the 111-room Hotel WBF is a seven-minute walk from the Namba Station and directly serves Kansai International Airport. It is purchased on a fixed lease-back for five years to the current hotel operator, WBF, which operates over 30 hotels across six prefectures in Japan, 11 of which are in Osaka.
Meanwhile, Utsubo East Building is an office building in Osaka’s central business district (CBD) with an occupancy rate of 98%. It is built on freehold land with a gross floor area (GFA) of around 5,000 sq m, and is a six-minute walk from the Hommachi Station on the Yotsubashi Line, located centrally around 300 metres from Mido Suji street and around 900 m from Festival City.
Lastly, Legal Itachibori Building, also an office building in Osaka’s CBD, is five minutes away from Hommachi Station. It has a GFA of about 5,600 sq m as well as a current occupancy rate of around 75%.
Thakral believes Hotel WBF is particularly well positioned to benefit from the additional supply of hotel rooms coming up in Namba as the area has recently started to attract more tourists.
Further, the group says the city’s bid to host the 2025 Expo, in addition to its front-running position to host Japan’s first casino resort, is likely to increase its appeal to Asian tourists and herald ne demand for hotel accommodation in the vicinity.
“As part of our strategy to increase investments in Japan, we will continue to look for more properties especially in the office and possibly in the retail sector in Osaka. We are optimistic that the investments will deliver positive returns and yield capital growth over time to enhance shareholder value,” comments Thakral’s CEO, Inderbethal Singh Thakral.
Shares in the group closed 1 cent lower at 44 cents on Monday.