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-12 August 2008

Japan Leisure Hotels Limited

('Japan Leisure Hotels' or the 'Company')

Hotel Acquisition

Japan Leisure Hotels Limited, the AIM listed company established to invest in Japanese leisure hotels, announces that it has reached agreement to invest in an additional leisure hotel located in Yokkaichi central Japan called 'Kukku No Omocha Oukoku' (the 'Property'). The Property will be purchased for a consideration of Japanese Yen 410 million (approximately £1.9 million) excluding costs and with this investment the Company will have invested in six leisure hotels accounting for a total of 242 rooms.

Investment Highlights: 

• The Property will be purchased for a price of Japanese Yen 410 million (£1.9 million), including acquisition costs (principally taxes) Japanese Yen 450 million (£2.1 million).

• The investment is to be funded entirely from existing cash resources of the Company.

• During the 12 months to May 2008, the Property generated EBITDA of approximately Japanese Yen 38 million on turnover of approximately Japanese Yen 162 million.

Further details of the Property and the Transaction:

The Property, which was built in 1987, is located within 5 kilometres of the city centre of Yokkaichi in Mie-ken and has 47 rooms. It is easily accessible by road and rail and very visible from a major highway.

Yokkaichi has benefited from significant foreign investment and is a key manufacturing centre within Japan - companies such as Toshiba, Honda and BASF having a strong presence in the area. Yokkaichi and the surrounding area support a healthy demand for leisure hotels, yet there is limited competition and the other hotels in the vicinity range in quality.

The Asset Manager has indicated to the Directors that, over time, the Company is expected to benefit from increasing returns from this investment which should generate additional cash flow from operations for distribution to the Company.

The closing of the transaction remains contingent on a number of factors which are under the control of third parties including, without limitation, the seller of the Property receiving the cooperation of a number of lenders. It is expected that these conditions precedent will be satisfied within the next four weeks. 

Alan Clifton, Chairman of Japan Leisure Hotels, commented; 'The Board views this investment as an extremely attractive opportunity to complement our investment in the existing portfolio of five hotels.  The asset manager has indicated to the Board that they believe there is significant scope for strong returns through the incorporation of this property with the existing portfolio and rebranding and upgrading.   

It is gratifying that, despite turmoil in the financial markets, the Company is able to pursue its strategy as set out at the time its Admission to AIM.'

For further information, please contact: 

New Perspective (Asset Manager)
Steve Mansfield, CEO New Perspective	+81 3 4550 1808
Shore Capital and Corporate Limited (Nomad)
Dru Danford / Stephane Auton	020 7408 4090
West Hill Corporate Finance (Financial Adviser)
Alan Richards / John Terrando	020 7464 8822
Tavistock Communications (Financial PR)
Jeremy Carey / Paul Youens	020 7920 3150 pyouens@tavistock.co.uk

Notes for Editors 

Japan Leisure Hotels is a Guernsey registered closed-ended company which was listed in January 2008 to invest into the Japanese leisure hotel industry and, through its investments, benefit from the consolidation of a highly fragmented industry.

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