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Thakral Corporation Ltd has expanded its real estate footprint in Japan with two new investment properties, the R Hotels Inn Osaka Kita Umeda as well as the Namba retail redevelopment site in Osaka.
The investment in the two properties will be made through its pooled investment vehicle, Thakral Japan Properties Pte Ltd, in which the group owns a 50 percent stake. Thakral’s existing investments in Japan include two office buildings and the Hotel Oaks Reaze Tsukamoto, which has been re-branded as Best Western Osaka Tsukamoto Hotel.
The group noted that the early entry has allowed it to enjoy the uplift in capital values of the existing investments, which enabled the group to access additional funding as well as grow its portfolio.
Thakral expects the investments to yield positive returns for shareholders.
Positioned as a business hotel, the 120-room R Hotels Inn Kita Umeda recently underwent a 500 million yen (about S$6 million) refurbishment. The Namba retail redevelopment site, on the other hand, is set to be developed into a three-storey retail building, which has been pre-leased to one of Japan’s leading retail chain.
Thakral is expected to obtain vacant possession of the site in March next year, with construction works slated to take nine months and completion within a year.
“We believe it continues to be an opportune time for our investments in Japan – particularly in Osaka. The area’s unemployment rate dropped considerably, to four percent last year, while the number of companies in Osaka grew 16 percent in the 12 months through March. The city plans to host the 2025 World Expo, and is also looking to host Japan’s first casino resort, when they are legalized, which would increase its appeal to Asian tourists,” said Thakral chief executive officer Inderbethal Singh Thakral.
He noted that the Japanese government has revised up its tourist arrival target to 40 million by 2020 and 60 million by 2030, with Osaka expected to be a key beneficiary of the tourism boom.
And given the uptick in average commercial land prices in Japan, the group will “continue to actively seek out new opportunities to invest in Japan to enhance returns on our capital”.
This article was edited by Keshia Faculin.
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