Japanese real estate developer Tokyu Land is betting on hospitality in the Land of Smiles, with the company’s Singaporean arm investing in a trio of Ibis-branded hotels in separate resort areas in Thailand as tourism stages a partial post-Covid comeback.
Tokyu Land Asia will acquire an ownership interest in the hotels, which are owned and operated by Thai developer Origin Property in the beach destinations of Phuket, Krabi and Hua Hin, according to announcements by both parties. All the hotels are franchise properties under Accor Group’s Ibis brand.
Tokyu Land said in a statement on its corporate website that it anticipates a resurgence in hotel demand as the Covid-19 pandemic subsides in Thailand and foreign tourist arrivals pick up. The new investment brings Tokyu Land Asia’s portfolio in the southeast Asian nation to a total of eight projects, including four hotels.
In its announcement of the deal, Stock Exchange of Thailand-listed Origin Property said its subsidiary, One Origin Company Limited, had partnered with Tokyu Land Asia to create a new entity with registered capital of THB 281 million ($8.3 million), with One Origin Company holding a 51 percent share while the remaining 49 percent is held by a vehicle of Tokyu Land Asia.
Thailand, which lifted its pandemic-related entry requirements last October, saw 11 million foreign visitors in 2022, surging from 428,000 the previous year and exceeding the country’s target of 10 million. The government expects 25 million tourists in 2023, compared to nearly 40 million in 2019.
The largest hotel is Ibis Phuket Kata, a 258-room property on Phuket Island in southern Thailand. Located at 88/8 Kata Road, 10 minutes away from Kata Beach, the five-storey hotel was completed in 2009 and sits on a roughly 5,700 square metre (61,354 square foot) site.
Tokyu Land Asia is also investing in Ibis Styles Krabi Ao Nang, a 206-key hotel built in 2014 in southern Thailand’s Krabi province, across the Phang Nga Bay from Phuket. The five-storey building is located on a 5,700 square metre site at 725 Moo 2 Ao nang.
Further up the Malay Peninsula, Tokyu Land Asia is taking a stake in Ibis Hua Hin, a 200-room hotel in the traditional resort town of Hua Hin about 220 kilometres (137 miles) southwest of Bangkok. The property at Petchkasem Road Hua Hin 87 rises six stories above a 3,400 square metre site.
“The outlook for Thailand’s hotel industry is solid with a number of hotels performing, especially in terms of rates, at above 2019 levels,” noted Chakkrit Chakrabandhu Na Ayudhya, executive vice president of investment sales for Asia at JLL Hotels & Hospital Group.
“The reopening of China in January 2023 has expedited the speed of recovery for hotels across the country. We expect the pickup to continue as more and more Chinese travellers come back, which will become more prominent in Q2 onwards,” he commented to Mingtiandi.
Chakkrit added that international investors remain active in Thailand’s hotel market, comprising about 40 percent of buyers over the last 10 years, most of them from Singapore, Hong Kong and the US. Singapore- and Hong Kong-based investors are mostly developers and corporates expanding their hotel portfolios, while the American players are chiefly private equity funds.
Singaporean budget hotel investor and operator Worldwide Hotels Group acquired a newly completed serviced apartment complex, the 177-key Oakwood Studios Sukhumvit Bangkok, for THB 1.1 billion late last year.
SE Asian Expansion
Formed in 2018, Tokyu Land Asia made its first investment in the Thai market in 2021 by teaming up with Origin Property on the mixed-use One Phayathai project near the Phaya Thai BTS station in Bangkok. The project, which is slated for completion later this year, features two IHG Group-operated hotels with a total of 412 rooms along with office and retail space.
Tokyu Land Asia has invested in a total of 17 projects in India, Malaysia, Thailand and Vietnam, spanning condo, hotel and office development projects, according to the company’s website. The parent firm, Tokyu Land, is part of Tokyo Stock Exchange-listed Tokyu Fudosan Holdings Group, which has a broad portfolio of real estate businesses serving around 18 million customers.
Origin Property, which focuses on condo development along with serviced apartments, hotels and retail properties, had total assets of 42.3 billion baht as of September 2022. In addition to its partnership with Tokyu Land, the company has worked with Japan’s Nomura Real Estate Development and Hong Kong’s Lofis Group on a series of residential projects in Thailand.