KUALA LUMPUR (April 29): YTL Hospitality REIT (YTL REIT) is planning to develop a hotel in Hokkaido, Japan, for an estimated total cost of RM199 million.

The proposed development will facilitate the use of available space on existing land owned by its unit Starhill REIT Niseko GK in Niseko Town, a skiing resort area in Japan, to enhance the income derived from such land, according to YTL REIT in a bourse filing.

The planned development involved a five-storey hotel with a two-storey basement under the Moxy brand, a segment of Marriott’s millennial-focused brand, YTL REIT said.

Upon completion, this Moxy Niseko hotel, which will have 310 rooms and a gross floor area of about 10,354 sq m, will be leased to YTL Corp Bhd under a variable rental arrangement.

“This will allow YTL REIT to participate in the operating income generated from Moxy Niseko which is expected to enhance the earnings and distributable income of YTL REIT,” it noted.

The proposed development, to be completed in the fourth quarter of 2026, will be funded via a combination of internal funds and borrowings, which is expected to raise YTL REIT's gearing to 45.4% from 40.4%, based on its audited consolidated total asset value and total borrowings as at June 30.

The expected rise in gearing also takes into consideration that the REIT had recently completed the acquisition of Hotel Stripes Kuala Lumpur for RM138 million, its acquisition of a hotel formerly known as Syeun Hotel in Ipoh for RM55 million, cash, which was completed earlier this month, and its planned refurbishment of the AC Hotel Kuala Lumpur Titiwangsa, AC Hotel Penang Bukit Jambul and AC Hotel Kuantan City Centre for RM38.5 million.

RHB Investment Bank has been appointed as the principal adviser to the manager for the proposed development.

YTL REIT’s unit price closed one sen or 0.8% higher at RM1.2, bringing the REIT a market capitalisation of RM2.05 billion.

YTL's shares, meanwhile, closed at a record high of RM3.20, after rising 17 sen or 5.6%, giving the stock a market value of RM35.3 billion. The stock, together with YTL Power International Bhd, which last year secured Nvidia chips for its upcoming Johor data centre, hit fresh highs on Monday as investors piled on stocks with exposure in artificial intelligence.