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Sat, Apr 14, 2007 - Page 10 News List

Morgan Stanley buys 13 hotels from ANA

BOUNCING BACK The hotels are all in Japan, where land prices are recovering from the decade-long stagnation that followed a property bubble burst in the early 1990s

AP , TOKYO

Morgan Stanley is buying 13 hotels from Japanese carrier All Nippon Airways Co (ANA) for ?281 billion (US$2.4 billion), both sides said yesterday, in a deal roughly doubling the US investment bank's portfolio of hotels in Japan.

The purchase, to be completed June 1, includes high-end hotels in Tokyo, the resort island of Okinawa as well as northern and southern Japan, ANA said in a statement.

FIRST INVESTOR

Morgan Stanley, one of the first investors to begin buying Japanese properties, already has interests in 14 hotels in Japan.

"This transaction highlights Morgan Stanley's continued long-term commitment to investing in Japan and optimistic outlook for the nation's economy and hotel industry," Morgan Stanley said in a news release.

COMPANY STRATEGY

For ANA, Japan's second largest airline by revenue after Japan Airlines Corp, the move is in line with its company strategy to focus on core passenger and cargo flight operations.

ANA is trying to strengthen its competitive edge ahead of an expansion and new runway at Tokyo's Haneda Airport slated for 2010.

YEARLY PROFITS

ANA said that the sale would raise its profits for the financial year ending next March.

However, it said it was still unclear how much its profits would rise.

The value of the hotel assets totaled ?150 billion as of March 31 last year it said.

JOINT VENTURE

The airline had been considering selling its hotel assets and outsourced hotel management to its joint venture with Intercontinental Hotels Group PLC, which will continue to run 30 hotels, including the 13 in yesterday's sale, ANA said.

ANA shares were up 1.5 percent at ?478 midafternoon on the Tokyo Stock Exchange.

Land prices in the world's second-largest economy are gradually beginning to recover from the decade-long stagnation that followed a property bubble burst in the early 1990s.

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