Hong Kong’s AB Capital Grows Japan Portfolio With Central Tokyo Hotel Buy

Hong Kong-based AB Capital on Tuesday announced the completion of a hotel purchase in Tokyo’s Taito ward, marking the seventh hospitality asset acquired by the Japan-focused fund manager.

The 175-room Vessel Inn Asakusa Tsukuba Express represents the third investment under the newly established AB Capital Japan Hospitality Fund II, the firm said in a release. Located in Asakusa district on the northeastern fringe of central Tokyo, the 1992-vintage hotel underwent “comprehensive renovations” last year. The seller and financial details weren’t disclosed.

With Japan’s hospitality sector experiencing unprecedented growth amid a surge in international tourism, Asia’s second-largest economy offers a major opportunity for AB Capital investors, said director Yutaro Nakadate, who served as lead on the latest deal.

“We are excited about the potential of Vessel Inn Asakusa Tsukuba Express to deliver strong returns, driven by its prime location, quality of its offering, and the overall positive trajectory of Japan’s hospitality industry,” Nakadate said.

Near Landmark Temple

The Vessel Inn sits less than 10 minutes by foot from Asakusa’s famed Sensoji temple and features guest rooms with an average size of 13.9 square metres (150 square feet).

Other local attractions include the Tokyo Sky Tree, Thunder Gate (Kaminarimon) and the iconic Asakusa district. A nearby Tsukuba Express rail station makes the hostelry an ideal choice for business or leisure travellers, AB Capital said.

The hotel’s recently appointed operator, Vessel Hotel Development, runs 34 hotels across Japan under the Vessel Inn, Vessel Hotel, Vessel Hotel Campana, Ref and Lequ brands.

“We are confident that our investment in Vessel Inn Asakusa Tsukuba Express will deliver superior risk-adjusted returns to our investors, benefiting from Tokyo’s thriving hospitality landscape,” Nakadate said.

Fund Fans Out

The Vessel Inn buy follows the acquisition of a pair of hotels in Osaka and Kyoto in July as the first deal completed by AB Capital Japan Hospitality Fund II.

The twin transactions came just over a year after AB Capital picked up a 220-room hotel in Tokyo as its fourth hotel acquisition in Japan since the COVID-19 pandemic.

The firm’s portfolio also includes two other hotels in Tokyo and one in Osaka. Using financing from local banks, CEO Alan 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.