The Marriott-managed property is located in Greater Nagoya, Japan’s third-largest metro area. Credit: Far East Hospitality Trust.

Singapore-based Far East Hospitality Trust (FEHT) is set to expand into the Japanese market with the acquisition of the Four Points by Sheraton Hotel in Nagoya.

It has entered the sale and purchase agreement with an undisclosed vendor for the acquisition of a 319-room upscale hotel property for Y6bn ($39.8m) and a kabushiki kaisha (Op Co) incorporated in Japan for approximately Y0.05bn.

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The acquisitions will be financed through Yen-denominated debt facilities, providing a natural hedge against currency fluctuations.

The property is managed by Marriott International and situated in Greater Nagoya, Japan’s third-largest metropolitan area.

The hotel offers convenient access to Nagoya Chubu Centrair International Airport and the Centrair Ferry Terminal, which offers a high-speed ferry to Tsu Nagisamachi port in Mie Prefecture, providing an alternative route to western Japan.

The property also benefits from its proximity to Aichi Sky Expo, enhancing its appeal to visitors of meetings, incentives, conferences, and exhibitions (MICE) events.

The acquisitions will expand FEHT’s geographical presence while keeping Singapore central to its long-term strategy.

FEHT chief executive officer of the managers Gerald Lee said: “This proposed acquisition marks a strategic milestone for FEHT as we expand our footprint beyond Singapore. Japan’s stable economic environment, robust tourism growth, increasing visitor spending, and strong government support for decentralising inbound travel make it an attractive market for expansion.

“In addition, Japan is an attractive destination for investments as hotels can be acquired at yields that are well above the borrowing costs. While this acquisition represents an exciting new growth opportunity, Singapore remains the core market and foundation of our long-term strategy.

“We remain committed to strengthening our existing portfolio and will continue to uphold our disciplined approach to prudent capital management, ensuring sustainable value creation for our stapled securityholders.”