Ascendas Hospitality Seeks Japan Hotel Acquisitions on Abenomics

Ascendas Hospitality Trust (ASHT) is

seeking investments in Japan where Prime Minister Shinzo Abe’s

efforts to revive the economy is boosting the prospects of its

hotel industry, Chief Executive Officer Tan Juay Hiang said.

Ascendas Hospitality Trust, a Singapore-based business and

property trust with one hotel in Japan among its portfolio of 10

hospitality assets, will focus its acquisitions in business

centers like Tokyo, Osaka and Fukuoka, Tan said. The hotel

industry will become “very attractive” as the yen’s decline

against the dollar makes travel to Japan cheaper, he said.

The trust, which said it raised S$706.6 million ($564

million) in an initial public offering last year, is seeking to

diversify its portfolio by adding assets in Japan where Abe’s

government and the Bank of Japan have pledged to end 15 years of

deflation and achieve a 2 percent inflation goal in two years.

The trust also plans to expand its portfolio by adding hotels in

Singapore, Hong Kong and South Korea, Tan said.

“Japan at this moment looks quite interesting as far as

the macro is concerned with Abenomics pulling its way,” Tan

said in an interview in the island state yesterday. “Japan is

definitely looking more attractive. So clearly, that’s one

destination.”

Tan said he’s focused on the election for the upper house

of parliament next month to see if Abe can get a majority to

push his policies through. Installed as prime minister after his
Liberal Democratic Party won a landslide victory in the lower

house of parliament in December, Abe faces a July election for

the less powerful upper house.

‘Early Stages’

“If they can get a majority in parliament then the next

three years politically should be pretty strong,” Tan said.

“As the economy turns positive, we will see more deal flows

popping up and transactions will get more intense, though we are

still in the early stages.”

China, Australia and Japan will continue to be in

Ascendas’s “radar chart,” while the trust plans to add three

new countries, Tan said adding that the trust targets to have an

equal weighting among the six countries.

“These six countries are politically quite stable, they

are mature markets and growth is still there,” he said, adding

that the company may eventually venture into emerging markets

such as Indonesia, India, Vietnam, Thailand and the Philippines

over the longer term.

Park Hotel

Ascendas Hospitality Trust is entering the Singapore hotel

market by agreeing to buy the Park Hotel Clark Quay for S$300

million last month, adding to the trust’s portfolio of 10 hotels

spread across Australia, China and Japan.

After the acquisition, Australian assets will decline to 54

percent of its holdings while Singapore will be about 24

percent, he said.

The Park Hotel Group is planning to sell additional hotels

in Singapore including the Grand Park City Hall at Coleman

Street and Grand Park Orchard, the Business Times reported in

April, citing sources it didn’t identify.

“We will see if the price they want makes sense, then we

would be keen to have a conversation with them,” Tan said

referring to the report on the sale. “The process has just

started from their end, so we will continue to evaluate.”

Hotel occupancy rates in Singapore averaged 86 percent in

the past three years, as a record number of visitors were lured

to new attractions such as two casino resorts and a S$1 billion

downtown park, according to government data.

Ascendas Hospitality Trust declined 1.2 percent to 86

Singapore cents in Singapore trading yesterday, bringing its

year-to-date decline to 8.3 percent and below its offer price of

88 cents a share. Its parent Ascendas Pte manages Singapore’s

biggest industrial real estate investment trust, and operates in

33 cities with S$14 billion of assets, according to its website.

To contact the reporter on this story:

Pooja Thakur in Singapore at

pthakur@bloomberg.net

To contact the editor responsible for this story:

Andreea Papuc at

apapuc1@bloomberg.net

Ascendas Hospitality Seeks Japan Hotel Acquisitions on Abenomics