KKR and Gaw Capital Partners are in talks to sell the Hyatt Regency hotel in Tokyo to Japan Hotel Reit Investment for more than 100 billion yen (S$879.3 million), according to people familiar with the matter.
The two investment firms bought the hotel in the Shinjuku area for an estimated 60 billion yen less than two years ago, and a quick sale reflects the heated interest in Japan’s hotels amid a tourism boom coupled with a weak yen and low borrowing costs.
CBRE Group and SMBC Trust Bank have been retained to advise on the sale, the people said, asking not to be identified because the discussions are private. The parties are seeking to finalise the deal early this year. Still, discussions are ongoing and they may decide against proceeding with a transaction, the people added.
Representatives for KKR, Gaw and Japan Hotel Reit declined to comment. SMBC Trust and CBRE did not respond to requests for comment.
New York-based KKR and Hong Kong-based Gaw purchased the Hyatt Regency from Odakyu Electric Railway in early 2023. The 712-room hotel is undergoing a full renovation in phases.
Japan Hotel Reit owns 51 hotels, according to its website.
Hotels in Japan have been among the most popular real estate assets during a tourism boom that’s been driven by the yen’s depreciation. A record 37 million people travelled to the country in 2024.
Hotels are typically viewed as inflation-proof real estate investments, because room rates can be easily adjusted versus rent contracts on other property that might be locked in for years. Average daily rates for Japan hotels in 2024 were more than 40 per cent higher than in 2019, according to real estate data provider CoStar.
Japan saw around 1.2 trillion yen in hotel transactions in 2024, a 51 per cent jump from a year earlier, according to MSCI Real Assets. BLOOMBERG
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