Singapore-listed CDL Hospitality Trust (CDLHT) (SGX:J85) announced on 1 December that it has entered into various sales and purchase agreement to acquire Japanese properties, Hotel MyStays Asakusabashi and Hotel MyStays Kamata, for JPY5.8 billion (SGD63.8 million)
The properties will be acquired from subsidiaries of a fund managed by SC Capital Partners. Should the acquisitions materialise, this will be CDLHT’s maiden foray into the Japanese hospitality property market.
According to the trust, the purchase consideration is lower than independent valuations of the properties given by DTZ Debenham Tie Leung Kodo Kaisha and International Appraisals Incorporated.
Hotel MyStays Asakusabashi is a business hotel which is located in central Tokyo. It is said to be located a few stations away from several popular sightseeing spots and attractions, such as the traditional cultural area of Asakusa. The hotel is also within walking distance to various subway and railway stations. Hotel MyStays Asakusabashi commenced operations in late 2009. The hotel sits on freehold land and it offers a total of 138 hotel rooms.
Meanwhile Hotel MyStays Kamata is also business hotel which is said to be a 10-minute train ride away from the Haneda Airport. The property commenced operations in late 2009 and offers a total of 116 hotel rooms.
The acquisitions, said to be yield accretive to CDLHT unit holders, will be funded initially by Yen-denominated debt and increase CDLHT’s gearing from 30.2% to 32.2%. Completion of the acquisitions is expected to be on or around 19 December 2014.
Units of CDLHT are currently listed on the Singapore Exchange at SGD1.74.