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Thakral unit invests in a hotel and two office buildings in Osaka, with combined value of 5.46b yen

MAINBOARD-LISTED Thakral Corporation has invested in a hotel and two office buildings in Osaka, Japan with a combined value of 5.46 billion yen (S$66 million). Thakral Corp is a real estate investment and lifestyle brands marketing firm.

The Hotel WBF (White Bear Family) Namba Motomachi and the office building Utsubo East Building were acquired under a new pooled investment structure. The other office building, Legal Itachibori Building, is being acquired from the group’s current pooled investment vehicle that has a different shareholding pattern from the new pooled structure.

The Hotel WBF (White Bear Family) Namba Motomachi has 111 rooms consisting of 26 double, 84 twin and 1 larger accessible twin. It is located seven minutes’ walk from the Namba Station which directly serves Kansai International Airport.

The hotel is purchased on a fixed lease back for five years to the current operator, White Bear Family, which operates over 30 hotels across six prefectures in Japan, with 11 in Osaka.

Utsubo East Building is located in the heart of Osaka’s central business district (CBD). The property is built on freehold land and has a gross floor area (GFA) of about 5,000 sq m. It has a current occupancy rate of 98 per cent and is six minutes’ walk from the Hommachi Station on the Yotsubashi Line.

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Legal Itachibori Building is about five minutes from Hommachi Station and located in the heart of the CBD. The property has a GFA of about 5,600 sq m and a occupancy rate of around 75 per cent.

The investments were made via Thakral Corp’s direct subsidiary, TJP Pte Ltd (TJPP) - a pooled investment vehicle with equity interests from the Group and co-investors - and its indirect subsidiary, SJ Property Investments Pte Ltd, which is held by TJPP. The group will hold about 50 per cent interest in TJPP.

Thakral Corp’s chief executive officer Inderbethal Singh Thakral said: “The acquisitions are part of our broader strategy to ride on the growing tenant demand in Osaka as the region has the highest occupancy rate owing to strong demand from visitors as well as a limited volume of office supply.”

The group noted in an Exchange filing that Osaka is enjoying a surge of activity in retail spending, hotel development and infrastructure investment ahead of the 2020 Olympic Games in Tokyo. The city has also bid to host Expo 2025.

Mr Bethal said that the Hotel WBF Namba Motomachi is a relatively new hotel and minimal capital and maintenance expenditure is expected to be incurred in the next few years. The group is looking forward to enjoy a high cash return on the property.

“As part of our strategy to increase investments in Japan, we will continue to look for more properties especially in the office and possibly in the retail sector in Osaka,” he said.

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