Hoshino Resorts REIT, Inc. announced that it received a notice of termination of the fixed-term building lease agreement (hereinafter the Lease Agreement) dated March 4, 2019 from ASAHI SHOKUHIN CO., LTD., a tenant of Hotel Nikko Kochi Asahi Royal. Details are as follows: Overview of Tenant Change (Termination of the Lease Agreement): Tenant name: ASAHI SHOKUHIN CO., LTD. (hereinafter the Tenant); Property name: Hotel Nikko Kochi Asahi Royal (hereinafter the Property); Rentable area (area subject to termination): 16,222.49 m2; Percentage of total rentable area of HRR: 3.1% (as of the date of this notice); Annual rent: JPY 180 million (Rent type: fixed rent only); Date of receipt of termination notice: September 30, 2022; Scheduled termination date: March 31, 2023. Background and Future of Termination of the Lease Agreement: The Tenant has decided to terminate the Lease Agreement based on the judgment that entrusting the management of the Property to Hoshino Resorts Group (collectively referring to Hoshino Resorts Inc., its parent company and its subsidiaries, and the same shall apply hereinafter), which has excellent management experience, is the best option for further growth of the Property and tourism in Kochi Prefecture in the tourism market, which is in a severe environment, such as a significant decrease in travel demand due to the spread of COVID-19.
The Lease Agreement provides for the right of the Tenant to terminate the contract in the interim by making a written declaration of intent to terminate the contract to HRR six months prior to March 31, 2023 as the termination date. The termination of the Lease Agreement is the Tenant’s exercise of such rights in accordance with the provisions of such agreement. After the termination of the Lease Agreement, Hoshino Resorts Group will take over the hotel business related to the Property from the Tenant as of April 1, 2023.
In connection with this, Hoshino Resorts Group and the Tenant have entered into a master agreement for the share transfer. The Property is currently under consideration for starting new operations as a hotel operated by Hoshino Resorts Group.
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