Japan Airlines Corp (JAL) sells hotels in Tokyo and Okinawa to US-based private equity funds
Japan Airlines Corp (JAL) has sold hotels in Tokyo and Okinawa to the US-based private equity funds Aetos Capital and Lone Star Funds. The Dallas-based Lone Star Funds bought three hotels in Okinawa - Hotel Nikko Naha Grandcastle, Hotel Nikko Yaeyama and JAL Private Resort Okuma - for at least ¥15 billion. This is Lone Star Fund's seventh hotel buyout in Okinawa. In the deal with Aetos Capital, JAL sold its 48% holding in Tokyo Humania Enterprise, which owns the building of Hotel Nikko Tokyo.
The deal follows JAL's earlier sale of two hotels to Goldman Sachs, including City Hotel in Kawasaki City.
In 2003 Goldmn Sachs bought three hotels from the Daiei retail store: Shin-Urayasu Oriental Hotel in Urayasu City, Chiba Prefecture; Kobe Meriken Park Oriental Hotel in Kobe City; and Nanba Oriental Hotel in Osaka.Goldman Sachs also owns the Hotel Nikko Alivila of Yomitanson, Okinawa.
Goldman Sachs also has bought local hotels such as Izumiso Inn in Ito City, Shizuoka Prefecture, and Komaki Hot Springs Hotel in Misawa City, Aomori Prefecture.
In related news, Morgan Stanely will buy 13 hotels (4,943 rooms) from All Nippon Airways for ¥281.3 billion (US$2.37 billion) in Japan’s largest ever real estate deal. According to Forbes, the deal will make the U.S. investment bank the largest hotel owner in Japan.
Morgan Stanley already has interests in 14 hotels in Japan.
According to a report in March, Morgan Stanley Real Estate fund will own 74.9% of a joint venture with Starwood Capital’s Starwood Hotels & Resorts designed to acquire the Sheraton Grande Tokyo Bay Hotel from Taisei Corporation Group,with Starwood owning the remaining 25.1%. The 802-room hotel, which is close to Tokyo Disney Resort, has been managed by Starwood since its opening in 1988 and will continue to be operated by the hotel company under a long-term management agreement with the joint venture.
In the latest deal to buy 13 hotels from ANA, Morgan Stanley will acquire the land and buildings, as well as a property management company and hotel management company, but ANA will continue to operate the hotels along with theInterContinental Hotels Group (IHG). ANA signed a partnership deal with IHG in October 2006.
Morgan Stanley is currently raising $8 billion for a global real estate fund, of which up to 40% could be deployed in Japan, where it began investing in distressed real estate assets in the late 1990s.
ANA to sell 13 hotels to Morgan Stanley for 280 billion yen
Kyodo News International 13 April 2007
All Nippon Airways Co. said Friday it will sell 13 domestic hotels to U.S. brokerage group Morgan Stanley for 281.3 billion yen as part of retrenchment measures.
Under the deal, decided at an ANA board meeting earlier in the day, the land and buildings of the hotels will be sold, and the airline will continue to operate the hotels, the airline said.
ANA is expected to reap about 130 billion yen in profit from the sale, according to sources close to the matter.
Foreign brokerage firms and investment funds have been accelerating real-estate investments in central Tokyo, where land prices are rising in line with Japan's economic recovery.
Morgan Stanley has already acquired a large-scale office building in Tokyo and other properties in Japan.
ANA had sought a buyer for the hotels through an auction, and real estate companies and investment funds at home and abroad had made bids.
The 13 hotels include the company's flagship hotel ANA InterContinental Tokyo, located in Minato Ward, as well as hotels in Hokkaido, Toyama, Ishikawa, Hiroshima, Fukuoka, Okinawa and other prefectures.
ANA said that together with InterContinental Hotels Group of Britain it will continue to operate the hotels after Morgan Stanley purchases them, and the names of the hotels will remain unchanged.
Japanese airlines are now focusing their financial and manpower resources on core airline businesses ahead of the 2010 expansion of Haneda airport in Tokyo.
Last October, ANA announced the sale of 74 percent of its stake in its hotel managing unit to InterContinental.
In a similar move, Japan Airlines Corp. has sold hotels in Tokyo and Okinawa to U.S. investment funds Aetos Capital and Lone Star, respectively. Copyright (c) 2007, Kyodo News International, Tokyo