Ascott-QIA JV Sells Hotel on Tokyo’s Ginza to Singapore’s Invictus

Singapore’s Invictus Developments has entered Japan with the acquisition of the Lyf Ginza Tokyo hotel, after the country logged $2.6 billion of hotel transactions in the first half of the year, representing a 64 percent year-on-year increase, according to JLL.

The developer and property investment firm owned by the family of Indonesian palm oil tycoon Bachtiar Karim acquired the 140-key hotel from the Ascott Serviced Residence Global Fund, a 50:50 joint venture of CapitaLand Investment’s Ascott hospitality unit and the Qatar Investment Authority. Financial terms of the transaction were not disclosed.

Invictus, which manages over $500 million of assets across Singapore and Australia, pointed to the acquisition as being the first in a series of hotel deals in the Land of the Rising Sun and expressed optimism for the country’s hospitality sector amid strong tourism growth.

“Lyf Ginza Tokyo marks our inaugural acquisition in Japan,” Chayadi Karim, principal of Invictus Developments and son of the elder Karim said in a release on Friday. “We anticipate this will be the first of many hotel acquisitions in Japan over the coming years. We remain optimistic about the Japanese hospitality market, driven by robust tourism growth and its status as a premier destination for all travellers.”

Upscale District

Opened in November 2023, the hotel is located in Tokyo’s upscale Ginza district just steps from Kyobashi station and a 10-minute walk from Tokyo station. The property exceeded Ascott’s target average daily rate and occupancy within three months of opening, according to CapitaLand Investment.

Following the acquisition, the property will continue to be managed by Ascott, the lodging unit of SGX-listed CapitaLand Investment, which serves as the investment management arm of Temasek Holdings-backed property giant CapitaLand.

“The divestment of Lyf Ginza Tokyo marks our first deal with Invictus Developments,” said Mak Hoe Kit, managing director of lodging private equity funds at CapitaLand Investment. “The property showcases our ability to add value through asset enhancement initiatives and leveraging Ascott’s operational expertise to optimise the performance of our assets.”

Ascott Serviced Residence Global Fund, a $600 million vehicle that was set up with Qatar’s sovereign wealth fund in 2015 to invest in serviced residences and rental housing assets in Asia Pacific and Europe, acquired the property in 2022 and refurbished the asset as the first hostelry under Ascott’s Lyf co-living brand in Tokyo.

The announcement comes just days after Ascott Serviced Residence Global Fund sold the 329-room Lyf Funan Singapore to CapitaLand Ascott Trust, a SGX-listed REIT sponsored by Ascott, for S$263 million.

Invictus Expansion

Invictus pointed to the potential for additional collaborations with Ascott as it expands its hospitality portfolio in Singapore, Australia, and Japan.

“Our focus on hospitality investments in key gateway markets across the Asia Pacific region will continue as we expand our portfolio of boutique, lifestyle, and upper upscale hotels in Singapore, Australia, and Japan,” said Chayadi Karim. “We are also excited to collaborate with Ascott and the Lyf brand and hope to deepen this partnership further not just in Japan, but across the markets we invest in.”

Earlier this year, Invictus lodged plans with the City of Sydney to convert a central Sydney office block into a 152-key hotel. The property firm paid A$52.5 million in August 2023 to acquire the building, which formerly housed the Australian headquarters of Bank of China.

Invictus also last August acquired the 50-key The Inchcolm by Ovolo hotel in Brisbane’s Spring Hill suburb for A$25 million, with that buy coming after the company spent A$43.8 million in March 2023 to purchase the 132-key Quest Wolloongabba apartment hotel in Brisbane. The company entered the Australian hospitality market in December 2022 with its acquisition of the 59-room Harbour Rocks Sydney hotel for a reported A$40 million.

Bachtiar Karim and his family ranked as the 15th richest Indonesian household last year with a net worth of $3.9 billion, according to Forbes.

Japan Hotel Deals Pile Up

With tourism in Japan having exceeded pre-pandemic levels with a record 17.8 million foreign visitors in the first half of the year, according to the Japan National Tourism Organisation, investors have been piling into the country’s hospitality assets.

JLL, which brokered the Lyf Ginza Tokyo transaction, is forecasting that purchases of Japanese hotel properties will reach $4.1 billion this year on the back of attractive yields, limited new supply, low borrowing costs, a weak yen, and a strong outlook for the tourism sector.

On Tuesday, Hong Kong-based AB Capital acquired the 175-key Vessel Inn Asakusa Tsukuba Express in Tokyo, marking the seventh hospitality asset acquired by the Japan-focused fund manager.

In July, Singapore sovereign giant GIC completed the sale of the Hilton Fukuoka Sea Hawk to Mizuho Leasing, with industry analysts predicting that Japan Hotel REIT, a Tokyo-listed trust managed by Singapore-based SC Capital Partners, will soon acquire the 1,053-key property from the leasing firm.

In June, Japan Hotel REIT announced plans to acquire two Okinawa hotels and two budget hostelries in Tokyo for a total of JPY 56.2 billion ($350 million), while France’s AXA IM Alts acquired a Kyoto hotel that same month for JPY 6.8 billion ($44 million).

Those deals came a month after New York-based fund manager Fortress Investment Group announced the acquisition of the Phoenix Seagaia Resort in southwest Japan’s Kyushu island from video game maker Sega Sammy Holdings.