IPC Corporation is branching from the residential property market in Japan into its hospitality sector with the acquisition of two business hotels in Tokyo.

The company yesterday said it has acquired a 96-room hotel in Asakusa and another 112-room hotel in Asagaya for a total of 1.87 billion yen (S$28 million).

According to IPC, the investment will be funded by internal sources, as well as a non-recourse, five-year term loan from a Japanese bank.

A hotel operator called Hospitality Partners Group has also been engaged to manage the two properties, IPC added.

The hotels are slated to open their doors in the third quarter of this year and they are expected to have a positive contribution to the company's 2010 financial year.

'The intention of the company is to acquire more income-producing assets, in particular business hotels in Japan with the view to having a constant income stream, whereas the strategy of acquiring the condominium properties is primarily for buy-sell basis,' IPC said in a statement.

The company made its foray into the Japanese property market last year and has acquired three residential developments to date.

In April this year, it acquired a distressed 77-unit condominium project in Uraga, located at the southern tip of greater Tokyo, for around 1.45 billion yen.

Its flagship purchase was a 520 million yen apartment project in Tsukuba, a city about 50km north-east of Tokyo. This 51-unit development was sold out last year.

IPC acquired a second condominium project in Tsuchiura for 190 million yen and the sale of these properties is expected to start in the second quarter of 2011.

IPC shares closed 3.8 per cent lower at 12.5 cents yesterday.

Source : The Business Times © Singapore Press Holdings Ltd. Reprinted with permission.