16
CDL
HOSPITALITY TRUSTS
YEAR IN REVIEW
Valued at ¥6.06 billion
(8)
, the two hotels are located in Japan's key gateway city of Tokyo and are situated in close proximity
to major transport hubs and tourist attractions. With this acquisition, CDLHT is presented with the unique opportunity to gain
exposure to the established and fast-growing Japanese hospitality market.
The wholly-owned subsidiary of HBT is the master lessee of the hotels and it has a hotel management agreement with MyStays
Hotel Management Co., Ltd. which manages the two hotels.
Exposure to a Growing Japanese Hospitality Market
Tokyo, being the largest hospitality market in Japan, is expected to be a key beneficiary of the improving tourism outlook. As the
financial and cultural capital, Tokyo will continue to be a popular destination for both business and leisure travellers coming into
Japan. The Tokyo hospitality market has also been performing well in recent years. Japan's tourism industry has been witnessing
tremendous growth with international tourist arrivals setting record numbers in 2013 and 2014, aided by monetary easing, fiscal
stimulus and structural reforms via "Abenomics". The weakening yen has also encouraged inbound travel. In 2013, Japan
registered a 24.0% yoy increase in international visitors to 10.4 million. For 2014, international visitor arrivals grew 29.4% yoy to
13.4 million
(9)
. According to STR, the Tokyo hotel market registered RevPAR growth of 9.9% yoy in 2014 driven largely by rate
increases. Hotel occupancy levels remain high at 86.8%
(10)
.
(8) The Japan Hotels which were acquired on 19 December 2014, were valued (average of two valuations done by DTZ Debenham Tie Leung Kodo
Kaisha and International Appraisals Incoporated) as at 30 October 2014.
(9) Japan National Tourism Organization
(10) STR Global Asia Pacific Review, 2014
21.1%
20.5%
18.0%
6.9%
6.6%
26.9%
TOP 5 INBOUND MARKETS TO JAPAN
Taiwan
South Korea
China
Hong Kong
U.S.A.
Others
TOP 5 INBOUND MARKETS TO JAPAN
YOY CHANGE FOR FY 2014
China
Taiwan
Hong Kong
South Korea
U.S.A.
Others
0 20 40 60 80 100
24.1%
12.2%
11.5%
26.9%
83.3%
28.0%
Looking ahead to the 2020 Tokyo Olympics, the Japanese government has set an ambitious target of 20.0 million international
visitors from the 13.4 million recorded in 2014. Ongoing initiatives such as the relaxation of visa requirements for visitors from
Southeast Asian countries, expansion of flight capacity of Haneda Airport, and the relaxation of duty-free rules are all likely to
further drive tourist arrivals into Japan.
Hotel MyStays Asakusabashi is located in central Tokyo, a few stations away from several sightseeing spots such as Asakusa,
Tokyo Sky Tower and Akihabara area. Hotel MyStays Kamata is located near to Keikyu-Kamata Station which is a 10-minute train
ride away from Haneda Airport. It is also within close proximity to JR Kamata station where there is direct access to JR Tokyo
Station as well as nearby major core cities such as Shinagawa, Kawasaki and Yokohama. In FY 2014, occupancy levels of the two
hotels were above 90.0%. Both hotels are expected to benefit from the positive demand drivers and this acquisition presents
an attractive opportunity for CDLHT to ride on the growth trajectory in the Japanese hospitality market.
NURTURING FOR GROWTH
The H-REIT Manager and HBT Trustee-Manager are continuously working with master lessees and hotel managers to enhance
the quality of the assets of CDLHT under management with a view to increase value and returns to Security holders.
In December 2013, CDLHT embarked on a major asset enhancement initiative for Orchard Hotel Shopping Arcade, the retail
mall adjoining Orchard Hotel, Singapore. It has been rebranded as Claymore Connect and will be repositioned as a family-
friendly mall with enhanced retail offerings for the captive residential population in the precincts of Tanglin, Orchard, and
Claymore. Apart from the anchor tenant Cold Storage, Claymore Connect will feature tenants such as MapleBear Singapore –
an early education centre offering Canadian education philosophies and practices combined with Singapore's bilingual literacy
