Seibu's hospitality portfolio presents unique opportunity for GIC to acquire prime assets across Japan: GIC top exec

Seibu Holdings confirmed that its Prince Hotels units will sell 31 properties to GIC affiliate Reco Pine for about 150 billion yen (S$1.74 billion). PHOTO: BLOOMBERG

SINGAPORE - The decision by Japanese conglomerate Seibu to offload part of its hospitality portfolio presents sovereign wealth fund GIC a unique opportunity to acquire high-quality assets in prime locations across Japan, a fund official said on Thursday (Feb 10).

Mr Lee Kok Sun, chief investment officer for real estate at GIC, said: "Given Japan's strong domestic tourist market throughout Covid-19 and increasing demand for global travel, we believe that these assets are well positioned to generate resilient returns."

Seibu Holdings confirmed on Thursday that its Prince Hotels unit - one of Japan's largest hotel chain operators - will sell 31 properties to GIC affiliate Reco Pine for about 150 billion yen (S$1.74 billion).

The hotels comprise almost half of Prince Hotels' 76 hotel and leisure assets in the country and include The Prince Park Tower Tokyo, Sunshine City Prince Hotel, also in Tokyo, and Naeba Prince Hotel, a ski resort in Niigata prefecture.

Mr Lee noted that GIC has been investing in Japan for more than 30 years. 

He added: "Our long-term confidence in the Japanese real estate market remains strong.

"We look forward to working with Seibu to enhance the value of these assets and establish a long-term partnership in Japan."

Seibu Prince Hotels Worldwide will continue to operate the properties sold to GIC.

Seibu said the deal will help it maximise revenue, further develop its hotel and leisure business and establish a long-term partnership with GIC, as it shifts towards an asset-light model.

"The company considered a wide range of potential purchasers carefully, and determined that GIC... was the most appropriate partner," added Seibu, which expects a profit of about 80 billion yen from the deal.

"Given the extensive experience of GIC in investing in hotels in and outside Japan, the company believes that building a partnership between the group and GIC will also contribute to the expansion of the hotel management contract businesses by Seibu Prince Hotels Worldwide."

GIC's other investments in Japan include the Shiodome City Centre office complex, completed in 2003, which it jointly developed with Japanese real estate company Mitsui Fudosan.

It also acquired the Sheraton Grande Tokyo Bay Hotel near Tokyo Disneyland in partnership with a real estate investment trust in 2017.

GIC has real estate holdings in around 40 countries, including prominent assets such as the Azia Centre in Shanghai, the Queen Victoria Building in Sydney and the Deutsche Bank Centre in New York City.

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