GIC Marketing Japan’s Largest Hilton Hotel for $580M

Singapore’s GIC has put a Japanese tourist hotel which was once Asia Pacific’s largest Hilton on the market as the sovereign wealth fund looks to contribute to a growing count of hospitality deals in Asia’s second-largest economy.

The $769-billion fund has appointed JLL to market the 1,053-key Hilton Fukuoka Sea Hawk hotel in Fukuoka, Japan at an asking price of JPY 85 billion to JPY 90 billion, industry sources told Mingtiandi on Tuesday, with the process having started in late August or early September of last year.

GIC’s sale effort comes as Japan’s tourism sector rebounded to pre-pandemic levels, with the country’s 2.4 million visitors in November falling just 474 short of the tally for the same month in 2019, according to government statistics.

Japan accounted for nearly half of Asia Pacific’s $3.2 billion in hospitality transactions during the third quarter of last year, led by Daiwa House selling a portfolio of 27 resort hotels to a consortium of Singapore’s SC Capital Partners, Goldman Sachs Asset Management and the Abu Dhabi Investment Authority for $900 million.

Great for Baseball Fans

Hilton’s management agreement for the 35-storey hotel near the famed Fukuoka Tower in the city’s Momochi coast area will be expiring “soon”, offering the potential to introduce new branding, according to a Bloomberg account which first broke the news.

The asking price works out to JPY 80.7 million to JPY 85.5 million per key for the property overlooking Hataka Bay and downtown Fukuoka, with industry insiders suggesting that GIC may be struggling to attract buyers at its asking price.

The sovereign fund took over the asset (then known as JAL Resort Sea Hawk Hotel Fukuoka) in 2007 as part of its acquisition of Hawks Town, a 169,157 square metre entertainment complex that also houses the Hawks Town Mall and what is now Fukuoka PayPay Dome stadium, which is home to the Fukuoka SoftBank Hawks baseball team.

Three years later, the 1995-vintage hotel underwent $20 million in renovations before reopening as a Hilton. The property was touted at the time as Asia Pacific’s largest hotel under the US brand, before being displaced by the Hilton Singapore Orchard when it re-opened in 2022 with 1,080 rooms.

Should GIC succeed in finding a buyer for the hotel, it will have completed its exit from the Hawks Town complex after having sold the mall element to Mitsubishi Estate in 2015, as reported by local media. The Singapore fund sold the 52,500-seat stadium to Softbank in 2012 for JPY 87 billion.

Representatives of GIC and JLL declined to comment on the marketing exercise.

Tourism Fuels Hotel Trades

GIC has put its mega-hotel on the market amid an upswing in Japan hospitality deals.

Hotel investments in Asia’s second-largest economy jumped 50 percent year-on-year to JPY 500 billion ($3.5 billion) during the first nine months of last year, according to a report by Savills.

A number of Japanese hotel deals were announced last month including the sale of the 75-key SH by the Square Hotel Kyoto Kiyamachi by Tokyo-based Kasumigaseki Capital, as well as Nomura Real Estate Holdings’ takeover of local hotel operator Urban Design System from Odakyu Electric Railway in a JPY 18 billion deal.

Earlier in December, Singapore-listed CapitaLand Ascott Trust announced that it was selling three hotels in Osaka to a fund managed by Alyssa Partners for JPY 10.7 billion.

Japan was the most active market in APAC for real estate investment last year, with $25.2 billion in trades of income-earning properties in the first nine months of 2023, according to MSCI Real Assets.