Frasers Hospitality Makes Maiden Acquisitions in Premium Rental Apartment Segment in China and Japan

Frasers Hospitality, a strategic business unit of Frasers Property, is pleased to announce the formation of two joint ventures with established real estate players, Tishman Speyer and Alyssa Partners, in China and Japan, respectively. As part of these joint ventures, Frasers Hospitality has entered into two sale and purchase agreements to acquire its inaugural premium rental apartment assets in Shenzhen, China and Osaka, Japan with a combined asset value of approximately S$170 million.

Tapping into North Asia’s burgeoning long-stay segment

The long-stay lodging segment in key locations across North Asia, particularly in Japan and China, has demonstrated resilience and tremendous growth potential over the past decade, driven by robust demand supported by a combination of demographic, economic and social factors driven by rapid urban migration. Housing affordability has also increasingly become a pressing issue in the aftermath of the COVID-19 pandemic which led to stronger demand for rental apartments. The premium rental apartment assets will complement Frasers Hospitality’s existing portfolio and deepen its presence in North Asia. With these timely acquisitions, Frasers Hospitality will be better placed to capture opportunities from the long-stay segment.

The 325-unit premium rental apartment in Shenzhen, China, is a leasehold asset jointly acquired with Tishman Speyer. Situated in the heart of the Luohu commercial and shopping district and within walking distance of the nearest train station, the property is well-positioned to benefit from Luohu’s strategic location as a key transportation hub between Shenzhen and Hong Kong as well as the district’s future growth potential with the launch of Luohu’s urban renewal plans in the next decade. The property, which will be managed and branded under Frasers Hospitality, forms part of a mixed-use development project that topped off last year and is slated to open in the fourth quarter of 2024, significantly reducing its time to market. 

The 124-unit premium rental apartment in Osaka, Japan, is a freehold asset acquired through a joint venture with Alyssa Partners. It is situated in the Namba precinct, a major commercial district in Osaka, and is within walking distance of the nearest subway station. The property is currently operational and at close to full occupancy. Osaka has been undergoing revitalisation in the lead-up to World Expo 2025 and the city has recently approved the development of Japan’s first integrated resort. These developments bode well for the growth potential and continued attractiveness of Osaka and the property is set to continue benefitting from the rising demand in the long-stay segment.

Expanding the portfolio with quality long-stay lodging assets

The acquisitions are in line with Frasers Hospitality’s post-pandemic transformation and expansion strategy to evolve into an international lodging real estate player and strengthen its position and growth as an investor of choice in the long-stay lodging segment. It also serves as a catalyst for Frasers Hospitality to deepen its presence and widen its reach within the long-stay lodging segment in key gateway locations.

Commenting on the joint ventures and acquisitions, Ms Eu Chin Fen, Chief Executive Officer of Frasers Hospitality said, “Long-stay lodging assets have become increasingly resilient and attractive as an asset class. We look forward to mutually beneficial long-term partnerships with our established joint venture partners, who have chosen to join hands with Frasers Hospitality to leverage our seamless, integrated investment model and long-standing operational expertise to add value to their investments. These acquisitions attest to our local teams’ extensive business networks and strong deal expertise to source for attractive, scalable investment opportunities. We continue to seek compelling opportunities to further expand in the long-stay lodging segment with the aim of delivering quality and sustainable returns.”

Riding on travel rebound wave as China reopens

The pair of acquisitions adds to Frasers Hospitality’s expanding portfolio in North Asia with close to 3,400 units in 16 properties across China, Japan and South Korea. Following the recent signing of a management agreement in Chengdu, China, under the Modena brand, there will also be a total of 11 properties in multiple cities across North Asia slated to open over the next three years. The launch of these properties comes at an opportune time as Frasers Hospitality continues to ride on the travel recovery trajectory in the post-pandemic landscape.

Mr Mark Chan, Chief Operating Officer of Frasers Hospitality said, “North Asia is an important market to Frasers Hospitality and we are excited about the expansion momentum in this region. Growth in other regions is also gathering pace with new properties soon to open in Singapore and Cambodia, and we look forward to sharing more news of our developments as our strong pipeline benefits from normalisation in the travel and lodging industry.”