Abu Dhabi checks into $900m deal for Japan hotels

SC Capital

• Abu Dhabi Investment Authority buys into 27 hotels across Japan
• Adia executive says Japan’s hotel market “positioned for growth”
• International travellers in May still a third down on pre-pandemic levels

A subsidiary of Abu Dhabi Investment Authority is part of a consortium that has completed a $900 million deal to acquire a portfolio of hotels in Japan.

The Adia subsidiary has joined Singapore’s private equity real estate firm SC Capital Partners and Goldman Sachs Asset Management in acquiring 27 hotels from Japanese developer Daiwa House Industry.

The hotels are located in tourist destinations across Japan, capturing both domestic and inbound demand. 

The consortium’s investment strategy will focus on increasing top-line revenue, rebranding initiatives, improving distribution channels and refurbishment works, a statement said.

• Abu Dhabi fund may back Telecom Italia’s network bid
• GCC and Japan to restart talks on free trade deal
• Mubadala co-launches $600m Japanese property fund 

The portfolio includes a total of 7,124 rooms which will be managed by Japan Hotel REIT Advisors Co, a company that is majority-owned by SC Capital Partners.

Mohamed Al Qubaisi, executive director of the real estate department at Adia, said Japan’s real estate sector continues to deliver superior returns, adding that the country’s hotel market is “well positioned for growth”. 

“This acquisition presented a unique opportunity to access a large, leisure-oriented hotel portfolio,” Al Qubaisi said.

Adia and SC Capital formed a partnership last November to invest up to $2 billion in data centres across the Asia-Pacific region. 

The Abu Dhabi sovereign wealth fund, which manages assets in excess of $708 billion, will also invest in SC Capital’s pan-Asian opportunistic investment strategy fund under the deal.

According to Japan National Tourism Organisation, the estimated number of international travellers to Japan in May was just under 1.9 million, still nearly a third down on pre-pandemic levels for the same month.

“We are delighted to expand and deepen our relationship with Adia, following the launch of a data centre investment programme,” Suchad Chiaranussati, chairman and founder of SC Capital Partners Group, said.

Takashi Murata, global co-head of Goldman Sachs Asset Management Real Estate, added: “As we continue to see strong recovery in the Japanese hospitality sector, we are confident these high-quality assets located in top tourist destinations throughout Japan are well-situated to benefit from the rebound.”

Last month, Mubadala launched a $600 million Japanese property investment joint venture.

Mubadala, which has $276 billion of assets under management, partnered with Canada’s Manulife Investment Management, Connecticut-based Proprium Capital Partners and Tokyo’s Samurai Capital to buy real estate in the world’s third-largest economy.

The project will target Tokyo and port city Osaka.