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Far East Hospitality, Far East Organisation unit to buy Japan hotel project

FAR East Hospitality Holdings and a Far East Organisation unit, Boo Han Holdings, have teamed up to buy a 2,542 sq m plot of land and a yet-unconstructed hotel in Tokyo, Far East Orchard, which owns 70 per cent of Far East Hospitality, announced on Monday.

The seller, Shimizu Corporation, will build the hotel and then deliver the trust beneficiary interest worth to an indirectly-held joint venture entity, in the form of a Tokutei Mokuteki Kaisha, upon completion of the sale.

The purchase price is 8.198 billion yen (S$100.5 million), shared equally between the two partners, and the forward purchase deal is expected to be completed in the second quarter of 2020.

The project is located in the Ariake district which is located a short car ride away from central Tokyo, Tokyo Disneyland Resort and Haneda Airport, and close by Tokyo Big Sight, the largest convention centre in Japan as well as the Ariake Arena, one of the venues hosting the Tokyo Olympics in 2020, said Far East Orchard in its announcement.

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"The purchase of the hotel project presents a prime investment opportunity and will provide the group with brand exposure in this major international gateway city," it added.

Neither the binding term sheet executed nor the conditional purchase and sales agreement are expected to have any material impact on the consolidated net earnings per share and consolidated net tangible asset per share of Far East Orchard for the year ended Dec 31.

Far East Orchard's shares closed one Singapore cent higher at S$1.45 on Monday.