APA Group of Japan has purchased Vancouver-based Coast Hotels for $210 million through a share purchase agreement with Okabe Co. Ltd. of Tokyo, the former owner of Coast Hotels.
APA is Japan’s largest hospitality firm with 373 hotels, Toshio Motoya, founder of APA, told a September 6 Vancouver press conference. Vancouver-based Coast Hotels has 36 properties including the Coast Coal Harbour Hotel in Vancouver and the Coast Harbourside in Victoria among its 19 B.C. properties. The firm also owns five hotels in Alberta, one in the Northwest Territories and 10 properties in the Western United States.
APA Group made an unsolicited offer to purchase the Coast Hotels, which was accepted by the Canadian firm’s parent company, according to a Coast Hotels spokesman.
The sale price is low when considered as a real estate purchase, said Carrie Russell of HVS International, an industry consultant. "It is primarily a management and franchise contract," she noted.
“We are delighted that an organization as entrepreneurial and respected as APA Hotel Group has chosen Coast Hotels as its route into the North American market,” said Victor Komoda, president of Coast Hotels.
Motoya said APA will make Vancouver its head office and base of operations for an aggressive North American expansion.
With more than 60,000 rooms currently under the APA brand, the company aims to reach 100,000 rooms by 2020, Motoya said.
The first steps will be the transforming key Coast Hotels into APA’s “new urban style hotel concept,” Motoya said through a translator. The suite upgrades include adding massive flat-screen TVs, one-touch room controls and more luxurious bathrooms.
The APA purchase continues a series of rapid-fire hotel acquisition in B.C. over the past year.
In 2015, B.C. posted a total hotel property sales volume of $759 million, up 31% from a year earlier. In the first six months of this year, 16 B.C. hotel sold for a total of $201.3 million. This included the $62 million sale of Victoria’s Oak Bay Beach Hotel in May and the June sale of the Hyatt Regency in Vancouver, which was acquired by Hong Kong-backed BlueSky Hotels and Resorts Ltd. as part of its $2.1 billion takeover of Innvest Real Estate Investment Trust.
Vancouver hotel transactions last year included the $180 million purchase of the Fairmont Hotel Vancouver and the $290 million sale of the Westin Bayshore. The latter penciled out to $567,500 for each of its 511 rooms, considered a per-room price record for a Canadian hotel property, according to Colliers International.
