
The Grand Prince Hotel Hiroshima is among the assets in Seibu’s sale portfolio
Less than a week after reports surfaced of Japan’s Seibu Holdings disposing of a portfolio of hospitality properties, the travel conglomerate confirmed on Thursday that it has agreed to sell 15 Prince hotels and 16 additional leisure properties in Japan to Singapore sovereign wealth fund GIC.
Seibu said on Thursday that it has entered into a basic agreement with GIC to sell more than a third of the 76 assets owned by its hospitality unit – considered to be one of Japan’s oldest hotel chain operators – in a bid to shore up its COVID-ravaged finances.
GIC will be paying an estimated JPY 150 billion ($1.3 billion) for the assets, according to Seibu’s statement, with the Japanese firm set to realise JPY 80 billion in profit excluding fees through its disposal of the 31 hospitality assets.
“Seibu’s hospitality portfolio is a unique investment opportunity for GIC to acquire a sizeable portfolio of high-quality assets located in prime locations throughout Japan,” said Lee Kok Sun, GIC’s chief investment officer for real estate. “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.”
GIC In For Long-Term Hotel Exposure
Seibu and the $774 billion sovereign wealth fund are scheduled to enter into a formal sale and purchase agreement in May which will finalise the list of assets and other terms of the transaction, with the announcement today confirming earlier reports that GIC had been selected as the sole bidder for the portfolio after edging out shortlisted investors including Blackstone and Softbank-backed Fortress Investment Group.

Lee Kok Sun, chief investment officer for real estate at GIC
The initial list of assets include 15 Prince hotels, 10 golf courses and 6 ski resorts across the country, and together represent most of Seibu’s Prince hotels in the northwestern part of Japan’s main island, a pair of Tokyo properties and seven more hotels in the northern and southern portions of the archipelago.
The two Tokyo hotels included are the 33-storey Prince Park Tower Tokyo and the 38-floor Sunshine City Prince, with Seibu also parting with its Tsumagoi Prince, Manza Prince, Manza Kogen, Shiga Kogen Prince and Naeba Prince hotels on Honshu island.
The company is also selling off its 1854-vintage Shimoda Prince hotel on the Izu peninsula, southwest of Tokyo. On Japan’s southern island of Kyushu, Seibu is parting with the 309-unit Prince Kyoto Takaragaike hotel in Kyoto along with the 510-room Grand Prince hotel in Hiroshima.
In Hokkaido and northern Honshu, GIC will gain ownership of four hotels, including the 587-room Sapporo Prince, the Shizukuishi Prince, the Hakodate-Onuma Prince, the Kushiro Prince and the Kussharo Prince.
The Tokyo-based firm said it would continue to manage the hospitality properties post-disposal, while sources identified property firm JLL as having been selected as asset manager for the portfolio.
Other assets Seibu is selling include Naeba Ski Resort in Niigata prefecture and Ryuo Golf Course in Shiga prefecture.
Savills head of research and consultancy for Japan Tetsuya Kaneko pointed to GIC’s track record in the country and its exposure to the hospitality industry as potentially having given in the inside track in winning the Prince portfolio, with the sovereign fund already owning the 844-room ANA Intercontinental Tokyo hotel. GIC is also among the major investors in AccorInvest – a European hospitality investment firm which owns and operates 843 hotels globally.
“GIC has been investing in Japan for over 30 years and 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,” said GIC’s Lee, with the sovereign fund said to be planning to hold the assets for the long term.
Hoping for a Hotel Rebound
In a separate filing on Wednesday, Seibu which has operations spanning hotels, passenger rail, dining and leisure, reported a loss attributable to owners of JPY 8.8 billion in the first nine months of 2021 – a fraction of the JPY 48.1 billion loss it reported for the same period one year earlier.
While the proceeds from its “asset-lightening” deal with GIC will only be realised in 2023, the Japanese firm is already projecting that it will post JPY 9 billion in net attributable earnings for the fiscal year ending 31 March, a reversal from the JPY 14 billion loss it had predicted in November.
Seibu said the asset disposal and the JPY 40 billion sale of its construction unit to Mirait Holdings should strengthen its financial base and help propel the firm’s hotel and leisure businesses to expand to 250 locations in and outside of Japan in the next 10 years, which would triple the 84 locations it currently operates.
GIC’s commitment follows a trend of institutional investors snapping up hotel assets in Asia on expectations that tourism will rebound post-pandemic, while hospitality operators offload assets to clean up their books after two years of low occupancy and record losses.
The proposed sale mirrors one of Japan’s largest property deals of last year, when Seibu’s rivals at Kintetsu Group Holdings sold a JPY 42.3 billion set of eight hotels to Blackstone in March 2021.
In November, Hong Kong-based Baring Private Equity Asia (BPEA) also bet that values for Japanese hospitality assets may have reached bottom, when the private equity firm paid around JPY 10 billion to acquire the 305-room B Osaka Midosuji hotel in Osaka which it then rebranded as a Holiday Inn Express.
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