GIC is acquiring a portfolio of 31 hotels from Japanese railway and hotel conglomerate Seibu Holdings for about JPY150bn (€1.1bn).

Seibu said that, as previously announced, the group was proceeding with “transformation of its business model” to become “an asset-light” company as part of management reforms.

Seibu has agreed with Reco Pine, an affiliate of GIC, to sell off some Prince Hotel assets including the Prince Park Tower Tokyo, Prince Hotel Sapporo, and Grand Prince Hotel Hiroshima. The assets also include four ski resorts and two golf courses.

Seibu said that, as part of the deal, the company had established a long-term partnership with GIC to undertake future development and to leverage off GIC expertise in hotel management, both inside and outside Japan, and the Singapore sovereign wealth fund’s financial resources.

“We will accelerate the growth strategy of the (Seibu) group in a post-COVID-19 society through the asset-lightening and group organisational restructuring,” the company said.

GIC’s CIO Lee Kok Sun, said: “Given Japan’s strong domestic tourist market throughout COVID-19, and increasing demand for global travel, we believe these assets are well-positioned to generate resilient returns.”

Lee said GIC had been investing in Japan for over 30 years, and its long-term confidence in the Japanese real estate market remained strong.

GIC’s last major hotel acquisition in Japan was the 2017 purchase of a 51% stake in the Sheraton Grande Tokyo Bay Hotel for JPY100bn. The remaining 49% is held by Invincible Investment Corporation.

To read the latest edition of the latest IPE Real Assets magazine click here.