Hillhouse Completes Buyout of Japan’s Samty as Developer Delists

Shareholders of Samty Holdings have approved a $1.1 billion buyout by Hillhouse Investment Management and its Rava Partners real estate unit, with the Japanese developer’s shares having delisted from the Tokyo Stock Exchange on Thursday.

More than 19 million Samty shares will be consolidated into three shares on 3 February as the new ownership group, which also includes Daiwa Securities, takes full control of Samty, according to a Wednesday filing by Samty Residential, a REIT sponsored by the newly privatised company.

With Samty’s shareholders having given final approval, the company will be absorbed by a vehicle controlled by a Hillhouse fund, with an equity contribution from Daiwa Securities. The privatised platform will continue to sponsor Samty Residential, whose portfolio comprises 191 accommodation assets across Japan with an acquisition value of JPY 171.9 billion ($1.1 billion).

“We will strive to expand the asset size and improve unitholder value while continuously receiving various support,” the REIT’s manager said. “If there are any matters that need to be newly announced in the future, such matters will be announced promptly.”

Transformative Takeover

Hillhouse and Rava launched their tender offer for Samty on 15 October of last year and concluded the exercise on 26 November with 50.04 percent of Samty’s shares having been tendered — exceeding the 29.48 percent minimum acceptance level required for the bid to proceed.

With the squeeze-out of the remaining shareholders now complete, Hillhouse and its partners aim to transform Samty into a property investment platform as the Japan market continues to command greater attention from international investors.

Hillhouse and Rava have characterised the take-private as part of a strategy to achieve sustainable long-term growth by shifting Samty’s capital-gains-focused model towards one with an emphasis on sustainable income through mergers and acquisitions that would enhance and streamline the firm’s operations. Current CEO Yasuhiro Ogawa is staying on to lead the effort.

“As a private company, I look forward to guiding the company as we strengthen our leadership position and transform into a regional accommodation asset manager with a fully integrated business model, the first of its kind in Japan,” Ogawa said in December. “Samty Holdings will benefit from Hillhouse’s extensive experience as well as the stability that comes from their long-term approach.”

Daiwa Securities, which together with its Daiwa PI Partners affiliate owned 37.18 percent of Samty before the take-private tender, plans to continue as a shareholder while working together with Hillhouse to support the company’s growth.

Consolidation Trend

Hillhouse’s latest milestone comes amid a recent wave of consolidation and privatisation of Japanese real estate firms, with SMFL Mirai Partners on Wednesday launching a tender offer for warehouse developer CRE Inc.

The fund management arm of Sumitomo Mitsui Finance and Leasing joined forces with CRE founder and chairman Shuhei Yamashita to offer JPY 1,700 each for the issued shares they don’t already own, representing a purchase price of JPY 21.7 billion ($140 million), according to a Tuesday announcement. The offer translates to a nearly 30 percent premium to CRE’s Monday closing price of JPY 1,309 on the Tokyo Stock Exchange and values the company at close to $300 million.

In October, property giant Hulic completed the tender offer for its JPY 173.5 billion acquisition of Raysum, with the TSE-listed builder becoming a consolidated Hulic unit. A month earlier, the asset management arm of Goldman Sachs and the founding family of Nihon Housing completed a take-private deal valuing the Tokyo-based property manager at JPY 77 billion.

Japan’s share of all private equity and venture capital investments in Asia Pacific grew in 2024 as the value of private equity deals targeting Japanese companies surged, according to a report by S&P Global.

The value of investment backed by private equity and venture capital in Japan rose 40.8 percent to $17.9 billion in 2024, the data provider said. The amount was equal to 15.6 percent of all private equity and venture capital investments in Asia Pacific in 2024, a share that grew from 10.6 percent in 2023.