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Thakral Corp invests in two Osaka properties
MAINBOARD-LISTED Thakral Corp has expanded its footprint with two new investment properties, the R Hotels Inn Osaka Kita Umeda and the Namba retail redevelopment site, in Osaka.
The investment in the two properties will be made through its pooled investment vehicle, Thakral Japan Properties, in which the group holds a 50 per cent stake. Its existing portfolio in Japan includes two office buildings and the Best Western Osaka Tsukamoto Hotel.
Thanks to its early entry into the market, the group has been able to "enjoy the uplift in the capital values of the existing investments", which has given it access to additional funding and enabled it to grow the portfolio further, it said. Thakral expects the investments to generate positive returns for shareholders.
The 120-room business hotel R Hotels Inn Kita Umeda has recently been refurbished for 500 million yen (about S$6 million). Meanwhile, the Namba retail redevelopment site is situated in the heart of Osaka's retail district and has a gross area of 71.65 tsubo (about 237 square metres). There are plans in the works to develop a three-storey retail building on the site for about 300 million yen, which has been pre-leased to one of the leading retail chains in Japan.
Vacant possession of the site is expected to be obtained in March 2018 with construction scheduled to take nine months and completion within a year.
Inderbethal Singh Thakral, Thakral's chief executive officer, said: "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 4 per cent last year, while the number of companies in Osaka grew 16 per cent in the 12 months through March."
Other drivers including an upcoming casino resort as well as the government's plans to boost tourist inflows to Japan to 40 million people by 2020. In the case of the latter, Osaka is expected to be a key beneficiary.
In addition, average commercial land prices in Japan have been rising on the back of improving business sentiment and increasing volumes of tourists.