Singapore-based ARA Asset Management has entered the US market with the acquisition of 38 hotels under the Hyatt Place and Hyatt House brands.

IPE Real Assets understands that the portfolio was sold for “north of $700m” (€616.8m) by Lone Star, on behalf of its Lone Star Real Estate Fund III.

The Hyatt portfolio is located across 21 US states and offers a total of 4,950 rooms.

John Lim, group CEO of ARA, said: “This latest acquisition marks our first foray into the US, with a sizeable portfolio of 38 quality, well-connected select service hotels geographically diversified across the country.”

Over the past year, he said, ARA had made headway expanding globally as it established its presence beyond Asia-Pacific to Europe.

Expanding into the US hospitality sector, Lim said, would add to ARA’s diversified suite of products and services in both the public and private markets.

“We will look at injecting this quality portfolio into our growing REITs and private fund platforms in the near future as part of our multi-platform, multi-product global fund management strategy,” he said.

Lim has confidence in the US hospitality sector, particularly in select service hotels where entry yields remain attractive.

The select service sector, which offers efficient, economical hotel rooms to business travellers, has outperformed the full service sector over the past two decades due to its simpler operating model and steady demand, said Lim.

Hyatt Place and Hyatt House are part of a global Hyatt family of hotels, which include brands such as Grand Hyatt, Andaz and Hyatt Regency.

In 2014, Hyatt Hotels sold the portfolio of 38 Hyatt Place and Hyatt House selective service hotels for about $590m to Lone Star Real Estate Fund III.

Lone Star handed the management of the assets to the Chicago-based hotel management company, Aimbridge Hospitality. The private equity group invested around $55m to renovate the portfolio.

According to industry sources, the US market accounts for 41% of total global hotel rooms and 40% of global room revenue.

ARA assistant group CEO and group chief investment officer, Moses Song, said acquisition of the Hyatt portfolio was a strategic initiative for ARA.

ARA will work with its new partners, Hyatt Hotels and Aimbridge Hospitality, to expand its presence in both the hospitality sector and the broader US market.

ARA also announced today the opening of an office in Dallas, Texas, and the appointment of Jin Y. Lee, an industry veteran of more than 25 years, to run its US hospitality operations.

An earlier version of this story incorrectly attributed a quote to John Lim.

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