GIC seeks to sell Hilton hotel in Japan for over 85 billion yen

SINGAPORE sovereign wealth fund GIC is considering selling a 1,053-room hotel in western Japan, and has been marketing the property to potential investors since late last year, according to sources familiar with the matter.

The Hilton Fukuoka Sea Hawk hotel is located on the coast of Fukuoka – one of Japan’s major cities – and has an asking price of around 85 billion yen (S$777.6 million) to 90 billion yen, said the sources, who asked not to be identified because the matter is private. Jones Lang LaSalle is advising on the sale, they added.

Hotels in Japan have been among the most popular real estate investments in the Asia-Pacific region in the past year, with many properties selling quickly and drawing interest from foreign and domestic buyers.

Investors are betting that tourism will continue its strong recovery amid a weak yen, and are attracted by the ability to change room rates quickly in an inflationary environment.

In the third quarter of 2023, about half of all hotel transactions in Asia took place in Japan, according to MSCI Real Assets. That helped the nation become the most active market for overall commercial property transactions in the region in the first nine months of last year.

Hilton’s management agreement on the hotel will expire soon, which may give any new owner the chance to bring in a new operator, the sources added.

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The sale process is still at an early stage, and GIC could ultimately decide against proceeding with a deal, the sources said. There’s also no guarantee that the property will change hands at the asking price, they noted.

Representatives for GIC and JLL declined to comment. Hilton does not comment publicly on its business relationships, a spokesperson said.

The hotel is part of a complex that GIC acquired in 2007, which included a baseball stadium and shopping mall. The wealth fund sold the arena, home to the Fukuoka SoftBank Hawks, to Softbank in 2012 for 87 billion yen. BLOOMBERG