CDL sells 14 billion yen Osaka hotel to Blackstone-managed real estate funds

The proposed divestment aligns with the real estate company’s capital recycling and portfolio optimisation efforts

City Developments Limited (CDL) is proposing to divest a hotel in Osaka, Japan, to real estate funds managed by Blackstone for 14 billion yen (around S$117 million).

On Tuesday (Nov 25), CDL said that its wholly owned subsidiary M&C Sakura TMK has inked a purchase and sale agreement with the potential buyers to divest the hotel, Bespoke Hotel Osaka Shinsaibashi.

Set to complete in December, the proposed divestment marks the group’s fourth major capital recycling transaction in 2025. It follows CDL’s sale of its stake in the South Beach development as well as the sales of Piccadilly Galleria and its multifamily asset in Sunnyvale, California, and brings the group’s total contracted divestments in the year to date to more than S$1.8 billion.

CDL said that the divestment aligns with its strategy to “unlock value and redeploy capital towards opportunities that enhance growth, strengthen the balance sheet and deliver sustainable shareholder returns”.

Daisuke Kitta, Blackstone’s head of real estate for Japan, said that the proposed deal will strengthen the investment firm’s footprint in Japan through the addition of a prime asset to its real estate portfolio.

Noting that the deal stands at the “intersection of two of Blackstone’s high conviction investment themes – the hospitality and leisure sector, and Japan”, Kitta added that Blackstone intends to identify new opportunities and partner with companies to deepen its hospitality presence in Japan.

Opened in 2019, Bespoke Hotel Osaka Shinsaibashi is a 256-room freehold lifestyle hotel located in Osaka’s Shinsaibashi commercial district. It is a five-minute walk from Midosuji Avenue, a street that is known for major international luxury brands and department stores.

With a land area of 938 square metres (sq m) and a gross floor area of 5,585 sq m, it is close to the famed Shinsaibashi-suji shopping street and is a 4-minute and 6-minute walk from Nagahoribashi and Shinsabashi stations respectively.

CDL acquired the hotel for 8.5 billion yen in August 2023, less than a year after Japan reopened its borders to visa-free international travel in October 2022.

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“The hotel benefited from the positive market recovery momentum amid robust demand from international visitors, further augmented by the successful World Expo 2025 Osaka Kansai, which has recently concluded,” CDL said.

Kwek Eik Sheng, CDL’s group chief operating officer, remarked that the divestment is “well-timed” as it “(takes) advantage of Japan’s strong hospitality demand”.

CDL shares closed Monday flat at S$7.08, before the news.

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