AXA Investment Managers to Purchase Hiroshima Hotel for ¥4.6bn

Main Photo: The Red Planet Hotel Hiroshima – imagined

Date: July 2019

Location: Between the Ebisu-Cho and Fukuro-machi tram stations, Hiroshima, Japan

Name: The Red Planet Hiroshima Nagarekawa – opening 2020

No. of Keys: 160

Seller: A joint venture between GreenOak Investment Management K.K. and Red Planet Japan Inc.

Established in 2010, Red Planet has become one of Asia’s fastest growing budget hotel chains. It operates 30 hotels with more than 4,700 rooms in four countries — the Philippines, Japan, Thailand and Indonesia — which includes one hotel in Tokyo not under the Red Planet brand.

To speed up the company’s development, it is now seeking to enter into a franchise contract and creating joint ventures with real estate funds. The company has plans to double its pan-Asia hotels to 60 by 2023. The company is headed up by Tim Hansing and Simon Gerovich. Goldman Sachs are investors.

Buyer: AXA IM – Real Assets.

Red Planet will operate the hotel as “Red Planet Hiroshima Nagarekawa,” on a long-term lease running to 2040.

The hotel will comprise 160 bedrooms, 14 parking spaces and a restaurant.

The hotel will benefit from its strong location in the heart of Hiroshima and easy access to public transportation. One of Hiroshima’s largest shopping districts is also within walking distance, as well as some of the city’s leading tourist destinations, including the Hiroshima Peace Memorial, one of the two world heritage sites in Hiroshima Prefecture. The Itsukushima Shrine, the other world-heritage site in Hiroshima, is only an hour away by train and ferry or direct boats.

The Red Planet Hiroshima Nagarekawa hotel acquisition adds to AXA IM – Real Assets’ €2.5 billion ($2.8 billion) portfolio of hotels across 11 countries that it manages on behalf of clients, and it is the third addition to its Japan hotels portfolio. AXA IM – Real Assets’ hotels are predominantly operated by leading hotel brands through various different management contracts, from traditional leases to franchise agreements.

“This acquisition is in line with our strategy to increase our exposure in the hotels sector in the region, and especially in the city of Hiroshima, which is consistently ranked as a top tourist destination in Japan for its world-renowned cultural landmarks, scenery, and cuisine,” said Laurent Jacquemin, head of Asia Pacific at AXA IM – Real Assets.

“As Red Planet Hiroshima Nagarekawa is their sixth development in Japan, we are well positioned to benefit from their local market expertise as well as from the expected rapidly rising inbound visitation to Japan. We will continue to seek further opportunities to add to our income producing managed portfolio, on behalf of our clients.”

Price: 4.6bn Yen (US$43m)

Price per Key: 28,750,000 Yen (US$272,060)

THPT Comment: AXA IM continue their march forward into hotels in global locations Hotels under AXA are predominantly operated by leading hotel brands through different management contracts, from traditional leases to franchise agreements.

First Seen: Institutional Real Estate

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