Nomura Real Estate Master Fund Buys Tokyo Hotel

Nomura Real Estate Master Fund Buys Tokyo Hotel




Nomura Real Estate Master FundNomura Real Estate Master Fund

Nomura Real Estate Master Fund is making its second hotel buy this year (Image: Google)

TSE-listed Nomura Real Estate Master Fund on Tuesday announced its acquisition of a hotel in Tokyo’s Taito ward, betting on demand for accommodation from international visitors to Japan’s capital.

The REIT sponsored by property heavyweight Nomura Real Estate Development revealed in an investor disclosure that it has purchased the Mimaru Suites Tokyo Asakusa, a long-stay hotel within  central Tokyo’s five wards, from a unit of Daiwa House for JPY 2.3 billion ($16 million). That price is around a quarter below the property’s appraised value of JPY 3.1 billion.

The parties expect to complete the transaction on 3 April 2024, with the trust’s manager stating that the asset is poised to benefit from Japan’s tourism recovery.

“The business condition of the asset to be acquired is on an upward trend as demand for accommodation in Japan is recovering due to lifting of the border measures including entry restrictions for foreign nationals in April 2023. Because the hotel to be acquired is located in the centre of Asakusa, a popular sight-seeing area among foreign visitors, the fund judged that the property has future growth potential and determined to invest,” the trust’s manager said in the statement.

Designed for Tokyo Travellers

The target of the acquisition is a 13 storey-hotel next to the Asakusa train station on the Tobu Isesaki line. Located a 20 minute walk from Japan’s tallest structure, the Tokyo Skytree, the building has a floor area of 2,889 square metres (31,096 square feet) which includes 36 guestrooms and a dining hall.

Shuhei Yoshida NomuraShuhei Yoshida Nomura

Nomura Real Estate Master Fund executive director Shuhei Yoshida

As each guest room is equipped with in-room kitchens and home appliances, the trust’s manager highlighted that the asset is popular among foreign visitors that plan to spend multiple days in Japan’s capital, with over 90 percent of guests over the past year being inbound tourists, with the same proportion staying for three consecutive nights or more.

After Daiwa House Group completed the asset in February of last year, its Cosmos Initia subsidiary, which develops and operates condo projects and apartment hotels across Asia Pacific, officially opened the Mimaru Suites Tokyo Asakusa in December 2022. Cosmos Initia was the vendor in the transaction announced this week.

As of Thursday, units of Nomura Real Estate Master Fund were trading at JPY 166,400 each, which was down 1 percent from their value at market opening on the day the deal was announced.

Japanese Hotels Stay Hot

The Taito ward acquisition is Nomura Real Estate Master Fund’s second hotel buy this year with the REIT having acquired the Hotel Wing International Premium Kyoto-Sanjo in the country’s ancient capital during September. Located around a 10 minute drive from the Kyoto Imperial Palace, the Nomura trust paid JPY 3.2 billion for that two-year-old property.

According to a market report from Savills, Japan’s hotel industry has benefited from a tourism revival in 2023, as the number of visitors to the country rebounded to around 65 percent of 2019 levels during the first half of the year.

“The hotel sector has undoubtedly seen significant recovery. Average daily rates (ADRs) look to remain elevated, and occupancy is likely to keep climbing as hotels continue hiring and training a larger workforce, leading to further revenue per available room (RevPAR) improvement,” the property agency noted in the report.

During the third quarter, around half of Asia Pacific hotel investment took place in Japan as trades of income-earning hospitality assets in the country increased by 21 percent compared to the same period in 2022 to reach JPY 216 billion, according to data from MSCI Real Assets.

The Nomura-sponsored trust also has also been acquiring residential properties this year, including buying two apartment buildings in central Tokyo six weeks ago from its sponsor for JPY 3.5 billion.

Last March, the trust purchased a portfolio of senior living facilities across Greater Tokyo for JPY 7.2 billion.


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