Asia Leisure partners with Japan Capital for new hotel project in Wadduwa

By Cheranka Mendis

Asia Leisure, a fully-owned subsidiary of Asia Capital Group, yesterday announced a strategic tie-up with Japan Capital Pvt. Ltd., through which the latter has made an initial investment of US$ 1.8 million in Asia Leisure’s property in Wadduwa.

Anticipated to be up and running by June/July next year, Japan Capital has bought over 22% of the property and is considering buying more shares in the near future.

Asia Capital Director/CEO Stefan Abeyesinhe stated that the Japanese company had incorporated a local arm to fund the partnership with interest in expanding into other areas of business such as real estate, advance technology investment and energy.

Part of a major expansion drive under Asia Leisure, this is the second tie-up with a Japanese company to take forward the plans of establishing more hotels in the country under Asia Leisure. In May this year, the company announced a partnership with Teoria Investment Japan which invested US$ 2 million in the property ‘Taprobana’ in Balapitiya.

“We are very bullish in establishing ourselves in the market. We are grateful to Japan Capital for coming forward and supporting our efforts to take this forward. The strategic partnership is ideal for Asia Leisure as it covers the cost of funding and allows rapid expansion in the market.”

Stating that choosing another Japanese company was a coincidence and that the company was picked for the interest it had shown in the project and in investment, Abeyesinhe stated that a Singaporean company was now in talks on developing the River House property in Balapitiya.

“The Japanese clients have become close to us and that the partnerships have worked well for our projects,” he added. The hotel, which is still unnamed, is likely to have 33 rooms which, post further discussion, could be increased in the future.

“Last year we were bullish in introducing private equity to the market. As most are aware, the stock market has been doing poorly for about a year now. Therefore we were keen on finding a new line of business to generate the necessary income. The leisure sector, in that respect, is ideal.”

This is the company’s fifth property in the sector which includes Park Street Hotel in Colombo, River House in Balapitiya, Tamarind Hill in Galle, and the upcoming Taprobane in Balapitiya. Abeyesinhe told the Daily FT that Asia Leisure was now raising capital for two more resorts in Galle and Dikwella. In Galle plans are in the pipeline to establish a 46-room beach resort for an approximate investment of US$ 8 million.

Land has been acquired in Trincomalee as well. The company also hopes to invest in a large property in the Dambulla/Habarana area and is currently on the lookout for potential land.

Japan Capital CEO Osamu Miyoshi said: “We are making a special effort to be a bridge of friendship between Sri Lanka and Japan. We have many advanced technologies which we hope to bring to Sri Lanka and market aggressively. We are also keen to offer information about Sri Lanka to Japanese companies and vice versa.”

Japan Capital Director Toshiaki Tanoka added the company was also exploring possibilities in areas of solar power generation, energy savers, and importing Japanese strawberries to Sri Lanka.