Japan’s Star Asia REIT Buying Four Hotels for $240M

Japan’s Star Asia Investment Corp has agreed to acquire four hotels for a total of JPY 34.6 billion ($240 million), as the Tokyo-listed REIT makes strides towards its goal of amassing JPY 300 billion in assets by 2026.

The assets consist of three central Tokyo hotels and a property in central Osaka, the trust’s manager said Monday in a release. The acquisitions are expected to close on 30 August.

For each asset, the unnamed seller is described as an “interested party” under rules set out by the manager. All four hotels are operated by Polaris Group, a listed subsidiary of sponsor Star Asia Group, the firm founded by former investment bankers Malcolm F MacLean IV and Taro Masuyama.

“The assets to be acquired, the four hotels, are properties for which the asset manager has preferential negotiating rights through sponsor support and will be acquired by utilising such preferential negotiating rights,” the manager said.

Buying in Ginza

The top asset in the haul by acquisition price is the 188-room Koko Hotel Tsukiji Ginza, which the REIT is picking up for JPY 17 billion, or about JPY 90 million ($620,000) per key.

Built in 2020, the limited-service hotel in Chuo ward’s Ginza area offers double, triple and quadruple rooms suitable for two or more people and is located six minutes by foot from Tsukiji station on the Tokyo Metro’s Hibiya line.

The REIT is also adding two residence-type hotels in Tokyo’s Taito ward, Koko Hotel Residence Asakusa Kappabashi (JPY 6.7 billion) and Koko Hotel Residence Asakusa Tawaramachi (JPY 8.9 billion), as well as the limited-service Koko Hotel Osaka Shinsaibashi (JPY 11.7 billion) in that city’s Chuo ward.

Upon completion of the buys, Star Asia Investment Corp’s portfolio will increase to 78 assets with a value of JPY 276.5 billion by acquisition price, the manager said.

Operators Under Control

The REIT’s expansion follows sponsor Star Asia’s May acquisition of Tokyo-based hotel operator Minacia from Unison Capital Partners for an undisclosed price.

Founded in 1990, Minacia runs 39 limited-service hotels with 5,180 rooms in major Japanese cities under brands such as Wing International and Tenza.

In 2018, Star Asia acquired a majority stake in Polaris, which operates 50 hotels with 8,958 rooms in Japan and overseas under well-known brands including Best Western and Red Planet.

Ranking 27th and 20th respectively in terms of rooms managed in Japan, Minacia and Polaris share similarities and compatibilities in their operations, according to Star Asia.