SC Capital Closes on $1B Japan Hospitality Fund

SC Capital Partners has closed on capital commitments totalling up to $1 billion for its Japan Hospitality Fund, just eight months after announcing the strategy.

SC Capital and two global institutional investors have made an initial commitment to the yen-denominated fund amounting to JPY 61 billion ($500 million), with a further top-up option to increase the total equity commitment to about $1 billion, the Singapore-based investment manager said Monday in a release.

Launched in mid-2021, the fund will focus on acquiring, repositioning or operating hospitality-related investments across Japan — including real estate, trust beneficiary interests representing real estate, companies and REITs — in a bid to capitalise on the eventual recovery of the tourism market in the world’s third-largest economy.

“The current environment is causing market dislocation and funding gaps, and we believe there is a compelling investment opportunity in Japan hospitality which SC Capital Partners Group, as a platform, is uniquely positioned to execute on,” said Suchad Chiaranussati, chairman and founder of SC Capital Partners. “We are excited to partner with two very reputable global investors and look forward to a successful long-term relationship.”

Bullish on Tourism

After the COVID-19 pandemic caused visitor arrivals in Japan to fall from nearly 32 million in 2019 to just 245,862 last year, SC Capital views this as an opportune time to invest in Japan’s hospitality sector at “deep value”.

In an interview with Reuters last August, Suchad said he was more optimistic about the tourism recovery in Japan than in any other Asia Pacific market.

“I believe very strongly that the trend of foreign visitors coming to Japan will recover and gather strength and continue for a very long time,” the Thai businessman told the news agency.

The Japan Hospitality Fund aims to generate annual returns to investors of 14 to 16 percent, according to Suchad.

SC Capital has invested in Japan hospitality assets since 2010 through its Real Estate Capital Asia Partners (RECAP) opportunistic fund series. The Singapore firm also owns almost 90 percent of the company that manages Japan’s largest hotel REIT, with Suchad serving as chairman of the manager’s board.

Swooping on Servers

While it hunts for Japanese hotel bargains, SC Capital is simultaneously making a push in Asia’s wide-open data centre race.

In February, the firm announced the launch of SC Zeus Data Centers with the development of a hyperscale South Korean facility at an expected cost of $500 million. The 45-megawatt bit barn in Seoul is part of the platform’s pipeline of Asian projects with 250MW of total IT load, including facilities in Singapore, Japan, Indonesia and Thailand.

Led by industry veteran Joe Gooi, formerly of US giant Digital Realty, SC Zeus is a joint venture of SC Capital and Singapore-based Abner Investments. SC Capital previously invested in the data centre space through its RECAP V fund.

SC Capital Partners Group has $7.3 billion in assets under management, comprising entities owned and controlled by Suchad either singly or together with his partners.