Ichigo Hotel REIT Buying Two Japan Hotels for $38M

Japan’s Ichigo Hotel REIT has agreed to acquire a property in Okinawa and another on the western coast of Honshu island for a total of JPY 5.7 billion ($38 million).

The Tokyo-listed trust sponsored by Ichigo, the investment manager led by American Scott Callon, is paying JPY 2.3 billion for the 135-key Smile Hotel Miyakojima in Okinawa and JPY 3.4 billion for the 227-key Hotel Enoe Toyama, according to an announcement.

The seller of the Okinawa asset is a unit of First Brothers, the Tokyo-based investment firm founded by Tomoki Yoshihara, a veteran of Mitsui and Morgan Stanley. The Toyama property’s seller is a third-party Japanese company, per the trust’s manager.

“Ichigo Hotel continues to execute on its strategy to build a stable, diversified portfolio and drive shareholder value,” the manager said.

Discounted Lodging

Ichigo Hotel REIT’s consideration translates to JPY 17 million ($110,000) per key for Smile Hotel Miyakojima, a 1990s-era facility with an addition completed in 2021. The property sits along Miyakojima’s Nishizato Dori tourist hub near Okinawa beaches and a 13-minute drive from Miyako Airport.

The 2004-built Hotel Enoe Toyama, a one-minute walk from Aramachi tram station in the capital of Toyama prefecture, is changing hands for just under JPY 15 million ($100,000) per key. The pair of properties are being purchased at a 14.2 percent discount to their combined appraisal value of JPY 6.64 billion.

The Okinawa buy was settled Monday, and the Toyama transaction is scheduled to close on 29 August. The deals will be funded partly by proceeds from February’s JPY 7.8 billion sale of Nest Hotel Osaka Shinsaibashi, the manager said.

Upon completion of the acquisitions, the REIT’s portfolio will comprise 31 hotels with a total acquisition value of JPY 73.4 billion ($490 million).

Record Tourist Numbers

Tourist numbers in Miyakojima, where the Smile Hotel is located, reached a record 1.19 million in 2024 and have been increasing every year since the end of the COVID pandemic, the manager said.

Overall visitor arrivals to Japan reached a May record of just under 3.7 million, according to official statistics, after April set an all-time single-month record of 3.91 million.

Japan aims to nearly double tourist numbers to 60 million annually by 2030, with Prime Minister Shigeru Ishiba instructing cabinet ministers to devise plans for achieving the goal.