KKR buys 14 hotels in Japan, converts them to midscale Sheraton properties
The properties are expected to open under the Four Points Express by Sheraton brand in H2 2024
ALTERNATIVE asset manager KKR has acquired a portfolio of 14 hotels in Japan, with plans to convert them to properties under Marriott International’s midscale brand, Four Points Express by Sheraton.
On Tuesday (May 7), KKR said the hotels were acquired from bankrupt Japanese hotel operator and real estate company Unizo Holdings, which in September 2023 was reported to have selected the US-headquartered firm as its restructuring sponsor.
The newly acquired assets are located in Hakodate, Morioka, Utsunomiya, Yokohama, Kanazawa, Nagoya, Osaka, Kyoto, Kobe and Hakata.
KKR highlighted these cities as “major tourist destinations”, and said it expects the deal to add more than 3,600 new rooms to both its own and Marriott’s hotel portfolios in Japan.
The properties are expected to open under the Four Points Express by Sheraton brand in the second half of 2024.
Noting a “growing consumer demand for reliable-yet-affordable accommodation in the region”, Marriott’s Asia-Pacific ex-China president Rajeev Menon said that KKR’s move would present the hospitality group with an opportunity to grow its midscale presence in the region.
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Kensuke Kudo, managing director of real estate at KKR, said: “International and domestic tourism in Japan has rebounded strongly since the pandemic and continues to pick up pace. As demand for midscale hotels grows rapidly, we see a tremendous opportunity to offer high-quality and comfortable accommodation at great value.”
The transaction marks KKR’s latest real estate investment in the Asia-Pacific region, along with Marriott’s entry into Japan’s affordable midscale segment. It also represents Four Points Express by Sheraton’s debut in Asia-Pacific following its 2023 launch.
Other investments made by KKR in Japan’s real estate sector include an “iconic full-service hotel in Shinjuku” which is understood to be the Hyatt Regency Tokyo, according to media reports last year.
KKR global head of real estate Ralph Rosenberg previously stated that the investment firm had plans to continue buying real estate assets in Japan, even if the country’s central bank raised interest rates.
In a March 2024 interview with Bloomberg, he highlighted Japan as KKR’s main focus for property in Asia, with the capacity to spend anywhere from US$20 million to more than US$1 billion on individual deals.
The Bank of Japan on Mar 19 announced its first rate hike in 17 years, days after Rosenberg’s remarks were published.
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