Monday, April 16, 2007

Morgan Stanley buying ANA hotels for US$2.4bil

Morgan Stanley said yesterday it will buy 13 hotels and two property management units from Japan's All Nippon Airways Co Ltd for US$2.4bil in the biggest hotel transaction in Asia. The deal will make the US investment bank the largest hotel owner in Japan.

The transaction comes amid increasingly fierce competition for commercial property in Japan, where land prices rose in 2006 for the first time in 16 years.

Japan's hotel market, worth about one trillion yen by sales, has lured investors on the back of recovering tourism and active investments in real estate partly driven by low interest rates in Japan.

Pedestrians walk past the ANA Intercontinental hotel in Tokyo. — Reuters
“The office and residential markets, especially in Tokyo, are quite overheated and investors are shifting their focus to higher yielding assets,” said Masahiro Yoshioka, a partner at management consultancy KPMG FAS Co.

“There aren't many such large scale property deals, and this was probably a great investment opportunity.”

Under the deal, ANA will sell its stakes in ANA Property Management Co Ltd, ANA Hotel Management Co Ltd and subsidiary companies of 13 hotels as of June 1 for 281.3 billion yen.

New additions to the portfolio of Morgan Stanley, which has been raising an US$8bil global property fund this year, will include ANA Hotel Tokyo in Minato ward, a prime Tokyo business district, and Okinawa Harborview Hotel on Japan's southern island of Okinawa known for sandy beaches.

Source : STAR
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