Frasers Hospitality Teams With Tishman, Alyssa to Buy $126M in China, Japan Apartments

Frasers Hospitality is tying up with Tishman Speyer and Tokyo-based Alyssa Partners to enter Asia’s rental residential sector through separate joint ventures in China and Japan involving S$170 million ($126.4 million) in build-to-rent homes.

The pair of deals will give the hotel and serviced residence operator a portfolio of 449 rental units as it joins a wave of institutional investors seeking to capitalise on the growth of rental housing markets in Asia’s two largest economies.

“Long-stay lodging assets have become increasingly resilient and attractive as an asset class,” Frasers Hospitality CEO Eu Chin Fen said in a statement. “We look forward to mutually beneficial long-term partnerships with our established joint venture partners, who have chosen to join hands with Frasers Hospitality to leverage our seamless, integrated investment model and long-standing operational expertise to add value to their investments.”

Frasers said the acquisitions in Shenzhen and Osaka will complement its existing portfolio as it aims to capture opportunities in long-term rental properties. In Shenzhen, the company already operates a Frasers Suites serviced apartment location — one of its 12 properties in mainland China — while the Frasers Residence Nankai serviced apartment complex in Osaka is its sole Japan property.

North Asia Expansion

In Shenzhen, the hospitality firm controlled by Thai billionaire Charoen Sirivadhanabhakdi has signed a joint venture agreement with New York-based Tishman Speyer to acquire a 325-unit set of rental apartments in the Luohu commercial district from China Resources Land.

The property, to be managed and branded under Frasers Hospitality, forms part of the Shennan 1001 mixed-use development that topped off last year and is set to open in the fourth quarter of 2024. The partners plan to renovate the 25,076 square metre (269,916 square foot) block, with their total investment estimated at RMB 717 million ($101.6 million).

“Shenzhen has become a technology and financial hub that continues to attract new businesses and residents, making it one of China’s most sought-after cities for rental apartments,” said Wilson Chen, CEO of Tishman Speyer China. “Our purchase of Shennan 1001’s rental apartment component is an ideal first investment for our partnership in the long term.”

In Osaka, Frasers Hospitality has teamed with regional investment manager Alyssa Partners to pick up a 124-unit rental apartment asset in Namba precinct within walking distance of the nearest subway station. The property is currently operational and close to full occupancy.

The acquisitions add to Frasers Hospitality’s expanding portfolio in North Asia of close to 3,400 units in 16 properties across China, Japan and South Korea. After recently signing an agreement to manage a Chengdu property under its Modena brand, the firm is scheduled to open 11 properties in cities across North Asia over the next three years.

“North Asia is an important market to Frasers Hospitality and we are excited about the expansion momentum in this region,” said Mark Chan, chief operating officer of Frasers Hospitality. “Growth in other regions is also gathering pace with new properties soon to open in Singapore and Cambodia, and we look forward to sharing more news of our developments as our strong pipeline benefits from normalisation in the travel and lodging industry.”

Potent Partnerships

The tie-up with Frasers is the latest chapter in Tishman Speyer’s long history in China, where the Manhattan-based firm developed The Springs Center in Shanghai’s Yangpu district. In January, Singapore’s CapitaLand Investment announced that it had purchased the first phase of the landmark office complex for RMB 7.6 billion ($1.1 billion).

Tishman has continued to acquire sites in Asia’s largest economy, including buying a commercial plot on Shanghai’s Tianshan Road for $800 million in 2021, and this month it teamed up with Hong Kong-based Raffles Family Office to launch an opportunistic Asia Pacific fund for ultra-high-net-worth individuals.

Founded in 2012, Alyssa Partners has carved out a niche in Japan’s real estate market by tracking down local investment opportunities in partnership with global fund managers.

Led by managing partner and CEO Chedli Boujellabia, Alyssa last year joined forces with Singapore-based private equity firm Q Investment Partners to launch a Japan-focused multi-family fund and joint venture after acquiring a seed portfolio of three stabilised assets with a combined value of $40 million.

Alyssa’s other deals in recent years include the acquisition of a portfolio of 19 multi-family assets across Tokyo, Osaka, Nagoya and Fukuoka alongside private equity giant Blackstone, as well as the co-development of the Roppongi Tower office project with French firm AXA IM Alts before exiting the investment in August 2021.