Blackstone Buys Eight Japanese Hotels

Blackstone announced a binding agreement to buy eight hotels in Japan from Kintetsu Group Holdings, in the latest case of a US fund manager teaming with a Japanese conglomerate looking to raise cash and cut costs by offloading non-core assets amid COVID-19 uncertainty

BY Realty Plus
Published - Tuesday, 30 Mar, 2021

Blackstone announced a binding agreement to buy eight hotels in Japan from Kintetsu Group Holdings, in the latest case of a US fund manager teaming with a Japanese conglomerate looking to raise cash and cut costs by offloading non-core assets amid COVID-19 uncertainty. US-based Blackstone said the portfolio it is purchasing from the railway group includes three prime assets: the 988-room Miyako Kyoto Hachijo across from Kyoto station; the 456-room Universal City, adjacent to Universal Studios Japan in Osaka; and the newly-built Miyako Hakata, with 208 rooms, next to Hakata station in Fukuoka. “This is a unique opportunity that grants Blackstone access to a sizeable, high-quality hotel portfolio in Japan’s top hospitality markets, and we’re thrilled that Kintetsu has chosen to partner with us,” said Christopher Heady, head of real estate in Asia for the NYSE-listed firm. The Japan deal is Blackstone’s third major hospitality acquisition to be announced this month, and the third time this year that it is working with an established Japanese conglomerate to spin off assets as the COVID-19 pandemic continues to strain finances around the region. The sale price of the eight hotels was undisclosed, however, Kintetsu said that the properties had a book value of JPY 42.3 billion ($390 million) as of 31 March 2020, with the Miyako Hakata alone accounting for JPY 14.3 billion. In addition to the three primary assets, the remaining five properties Blackstone is purchasing from the railway operator are a mix of upscale hotels and resorts within the Greater Osaka and Nagoya regions, with the smallest being the 30-room Miyako Kobe Kitano hotel. The entire portfolio amounts to 2,294 rooms, with Kintetsu Group to continue to operate the properties under the current staff and the hotel names to remain unchanged following the transaction. Blackstone announced the deal as it proposes to take on a much larger hospitality package in Australia. Casino giant Crown Resorts announced early last week that the US fund manager had made a $6.2 billion offer to take over the firm. Earlier this month the firm also teamed up with Starwood Capital to sign an agreement to purchase US hotel operator Extended Stay America for $6 billion after the suite-oriented hotel chain leveraged its popularity among temporary health care workers during the pandemic.