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Singapore’s ARA Asset Management recently announced that it has completed the acquisition of a portfolio of 38 select service hotels across 21 states in the US from Lone Star Real Estate Fund III.
While the total selling price was not revealed, DealStreetAsia reported that the properties were estimated to have been sold by American private equity firm Lone Star Funds for more than US$700 million (S$955.71 million), according to IPE Real Assets.
Hyatt’s affiliates had previously sold the properties in 2014 for about US$590 million.
ARA revealed that the transaction marks its maiden foray into the US property market, and the assets will be branded as Hyatt Place and Hyatt House.
“This latest acquisition marks our first foray into the US with a sizable portfolio of 38 quality, well-connected select service hotels geographically diversified across the country,” said ARA’s Group CEO John Lim.
“Expanding into the US hospitality sector adds on to ARA’s diversified suite of products and services in the public and private markets. We will look at injecting this quality portfolio into our growing REITs and private fund platforms in the near future as part of our multi-platform, multi-product global fund management strategy.”
ARA said it’s bullish on the US hospitality sector, specifically in select service hotels, as the yields of such properties remain attractive.
Moreover, the US has the world’s most developed hotel sector, as the nation respectively accounts for 40 and 41 percent of the hotel room revenue and hotel room count globally.
The country’s hospitality industry is also supported by its strong economy, which is expected to expand by nearly 3.0 percent for the whole of 2018, according to the International Monetary Fund.
To oversee the hotel investments in the US, ARA will establish an office in Dallas, Texas. This will serve as its base of operations in the country, and this will be managed by Jin Y. Lee, who has over 25 years of experience in the hospitality sector.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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