Main Photo: The Hotel Kintetsu Universal City, one of the eight hotels sold to Blackstone
Date: March 2021
Locations: Kyoto, Osaka, and Fukuoka as well as in the Greater Osaka and Nagoya regions.
Name: The sales includes the Hotel Kintetsu Universal City, which is near Universal Studios Japan in Osaka, and Miyako Hotel Kyoto Hachijo.
No. Keys: TBA
Seller: Kintetsu Group Holdings, are selling 8 of their 24 hotels, which they will continue to manage.
Buyer: Blackstone Real Estate funds are buying a portfolio of eight hotels in Japan from railway holding company Kintetsu Group Holdings.
Financial details were undisclosed but Japanese media is reporting that the transaction was around ¥60bn (€466m).
The hotels are located mostly in key tourist destinations, including Kyoto, Osaka, and Fukuoka as well as in the Greater Osaka and Nagoya regions.
Chris Heady, Blackstone chairman of Asia-Pacific and head of real estate, Asia, said: “This is a unique opportunity that grants Blackstone access to a sizeable, high-quality hotel portfolio in Japan’s top hospitality markets.”
He said the transaction marked Blackstone’s third corporate carve-out in Japan, a market that had seen its investment landscape transformed over the years as corporations increasingly looked to divest their non-core businesses to a trusted partner.
Blackstone’s head of real estate in Japan, Daisuke Kitta, said: “We are very pleased that an established company like Kintetsu selected us as their partner in these marquee assets. “
Having established a strong relationship with the Kintetsu management team over the past few months, Kitta said, Blackstone looked forward to working closely with Kintetsu to further create value for the properties.
In its filing, Kintetsu said it would continue to operate the hotels. The group will continue to own 16 other hotels.
“This is also another step towards expanding our footprint in Japan and diversifying our portfolio,” Kitta said, adding: “Last year, we had a record year despite a challenging environment. Our real estate business invested US$5.2bn in 2020 in Japan alone.”
Last year’s investments include the acquisition of a ¥110bn real estate portfolio, the buying back of some 220 residential apartment blocks for ¥300bn and the acquisition of four logistics assets for ¥55bn.
Blackstone is part of a wave of foreign investors hunting for deals in Japan while banking on a rebound from the COVID-19 pandemic as companies shed non-core assets.
In a filing, Kintetsu said the hotels have a book value of 42 billion yen ($385 million) and are part of a portfolio of 24 hotels. The sale was spurred by cost cutting during the pandemic, Kintetsu added, with Blackstone selected for its global real estate investing experience.
THPT Comment: Blackstone have busy both in Japan, as well as in the UK with their deal to take over Bourne’s Butlins and Warner Leisure Hotels just last month.
First Seen: Hospitality Ireland
The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.