Ascendas Hospitality Trust on Thursday said it entered into a memorandum of understanding to lease Hotel Sunroute and Oakwood Apartments in Ariake, Tokyo.
Ascendas would lease Sunroute's dual-brand accommodation consisting of 790-room and Oakwood Apartments' 122 serviced apartments to Sotetsu Hotel Management with effect from April 1.
Sotetsu Hotel Management is a conglomerate company consisting of 29 subsidiary companies and operating in four major business segments. It operates more than 70 hotels in Japan.
As per the deal, the existing fixed-term building lease agreement will be extended to cover the entire hotel property, the company said in a regulatory filing.
The tenure of the fixed-term building lease agreement will also be extended to March 31, 2033, and the entire hotel will operate under the "Sunroute" brand.
"We believe that a single hotel operator managing the Hotel can create synergy as the Hotel will be able to offer different room types under a single platform and also operate at higher cost efficiency," Tan Juay Hiang, CEO of the managers of Ascendas Hospitality Trust said.
"The refurbishment will improve the competitiveness of the Hotel which we believe is well-positioned to reap the benefits of the vibrant hospitality market in Tokyo and in particular, during the 2020 Olympics Games."
Shares in Ascendas Hospitality Trust were unchanged at S$0.84 on the Singapore Exchange.