Star Asia Group to Acquire Japanese Budget Hotel Operator Minacia

Japan-focused property investor Star Asia Group has agreed to acquire 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, Star Asia said Thursday in a release.

The pending deal follows Star Asia’s 2018 acquisition of a majority equity stake in Tokyo-listed hotel operator Polaris Holdings, 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.

“Star Asia Group believes that valuable synergies can be expected from future collaboration between Minacia and Polaris,” said the firm founded by former investment bankers Malcolm F MacLean IV and Taro Masuyama.

Unison Exits

Tokyo-based private equity firm Unison Capital acquired a majority stake in Minacia from the operator’s founding family in December 2017. After the COVID-19 outbreak in 2020, Unison and other stakeholders provided financial support and Minacia ultimately achieved its highest-ever profits in 2023, according to a separate statement by Unison.

“We are confident that Minacia will further expand and advance its business in its next phase of growth under the support of its new shareholder,” said Unison, which invests primarily in mid-cap companies.

Star Asia, meanwhile, has invested more than JPY 1.27 trillion ($8.2 billion) in opportunities related to real estate, including properties, loans, securitised assets and companies. Its capital partners have included US university endowments and foundations, sovereign wealth funds, and US- and Asia-based family offices.

In addition to Polaris Holdings, Star Asia sponsors a Tokyo-listed REIT, Star Asia Investment Corporation, whose $1.8 billion portfolio includes 74 properties across office, logistics, retail, residential, hospitality and student housing.

Occupancy Up

The Minacia transaction, scheduled to close on 31 May, comes after a first quarter of the year in which Tokyo’s budget hotels achieved an 85 percent occupancy rate, closing in on their previous peak of 87 percent during the fourth quarter of 2018, according to a report by DWS.

Average room rates for select key hotels in Japan during the first quarter surpassed pre-pandemic levels by as much as 35 percent, according to Nikkei calculations cited by the German fund manager.

An even stronger recovery is anticipated in the coming quarters, supported by improvements in international air connectivity and limited future hotel supply, DWS said.