Hong Kong’s AB Capital Adds to Japan Portfolio With Tokyo Hotel Buy

Hong Kong-based AB Capital Investment has acquired a 220-room hotel in Tokyo for an undisclosed amount, marking the hospitality-focused private equity firm’s fourth hotel acquisition in Japan since the COVID-19 pandemic.

The firm led by co-founder and CEO Alan Kam bought APA Hotel Kamataeki-Higashi in the Kamata area west of Haneda Airport from Aoki Kabushiki Kaisha and Aoki Building Kabushiki Kaisha, AB Capital said in a release. The transaction closed on 31 May.

The 14-storey business hotel comprises 3,070 square metres (33,045 square feet) of gross floor area and is situated between Kamata and Keikyu-Kamata railway stations, the latter providing an eight-minute ride to the world’s fifth-busiest airport by passenger volume.

“This transaction demonstrates our confidence and commitment to the Japan real estate market, where we see tremendous potential for growth and value creation,” Kam said. “We look forward to continuing to support the operator of the hotel and delivering superior return to our investors.”

Ready to Ride Rebound

APA Hotel Kamataeki-Higashi is under the brand of APA Hotel, which has 692 hotels with 130,004 rooms across Japan.

The acquisition adds to an AB Capital portfolio that includes two other hotels in Tokyo and one in Osaka. Using financing from local banks, Kam and co-founder Bryan Lee bought the 48-room Folio Sakura Shinsaibashi Osaka by Banyan Tree in December 2020, the 43-room Prostyle Ryokan Tokyo Asakusa in June 2021 and the 113-room Hotel LiVEMAX Shinjuku Kabukicho Meijidori in March 2022.

Like the other hotels targeted by the Hong Kong-based fund manager, APA Hotel Kamataeki-Higashi delivered consistently strong performance even during the pandemic. Japan’s tourism industry has enjoyed a rebound in most major cities since the country reopened in late 2022, supported by the cheap yen and government subsidies.

“With the tourism industry seen as an important growth driver for the nation’s post-COVID economic recovery, the Japanese government has set a target of achieving 60 million visitors by 2030,” AB Capital said.

Foreign Investors Still Checking In

Japanese hotels remained attractive to foreign investors in the first half of the year, as buyout giant KKR teamed up with Hong Kong’s Gaw Capital Partners to buy the Hyatt Regency Tokyo for JPY 57.1 billion ($410 million), while Canada’s BentallGreenOak snapped up the Rihga Royal Hotel Osaka for JPY 50 billion ($360 million).

Last year, Singapore sovereign wealth fund GIC acquired a portfolio of railway operator Seibu Holdings’ hotels, resorts and golf courses managed under the Prince hospitality brand in a JPY 150 billion ($1.3 billion) deal.

The Seibu hospitality portfolio includes the 33-storey Prince Park Tower Tokyo hotel in Shiba Park, the 587-room Prince Hotel Sapporo hotel in northern Japan and the 510-room Grand Prince Hotel Hiroshima.