IPC Corporation in Japan is branching from the residential market into the hospitality sector, with the purchase of two business hotels in Tokyo.
The company said it has purchased a 112-room hotel in Asagaya and another 96-room hotel in Asakusa amounting to 1.87 billion yen (S$28 million).
IPC added that the investment will be financed by internal sources and a non-recourse, five-year term loan from a Japanese bank.
Hospitality Partners Group, a hotel operator, has also been appointed to manage the two properties, said IPC.
The hotels are expected to be launched in the third quarter this year and are expected to have a positive contribution to IPC’s 2010 financial results.
"The intention of the company is to acquire more income-producing assets, in particular business hotels in Japan with the view to having a constant income stream, whereas the strategy of acquiring the condominium properties is primarily for buy-sell basis," IPC said.
IPC made its way into the Japanese property market in 2009 and has already acquired three residential sites. In April 2010, it purchased a distressed 77-unit condominium project in Uraga, at the southern tip of Tokyo, for about1.45 billion yen.
Its flagship acquisition was a 51-unit apartment project in Tsukuba, a city north-east of Tokyo, for nearly 520 million yen. The project was sold out last year.
The company also purchased a second condominium project in Tsuchiura worth 190 million yen. The sale of the properties is expected to begin in Q2 next year.