Unique cross-border transaction for Kyoto Boutique Hotel reinforces long-term confidence in Japan hotel market despite challenging COVID backdrop says Nihat Ercan, Managing Director, Head of Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group.

JLL Hotels & Hospitality Group today announced the closure of a cross-border transaction by Singapore-based Park Hotel Group for a newly-built asset in Kyoto, Japan.

The group will today formally take ownership of the Kyoto Boutique Hotel, an asset featuring 114 contemporarily designed rooms and a ground floor bar and restaurant catering to the strong footfall outside the hotel.

A joint venture between Park Hotel Group and Apricot Capital purchased the freehold boutique property from Angelo Gordon and Mizuho Real Estate Management. The asset has a gross leasable area of 3,276 sqm and all elements of the transaction were advised by JLL’s teams in Singapore and Japan.

“Confidence in Japan’s hotel market has remained high throughout a challenging year and the long-term fundamentals of both the tourism and business markets remain favourable as we look beyond COVID. We’re delighted to advise on such a unique transaction and bring together the full strength of our regional platform to deliver an optimal result for all parties,” says Nihat Ercan, Managing Director, Head of Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group.

Significantly, the deal was agreed and signed after the onset of COVID-19 with key inspections completed virtually, a first for a hotel transaction in Asia. The transaction also reinforces the strong fundamentals of the Japanese real estate market and the continued interest for hotel opportunities in Japan from international investors, offing to the sizable domestic leisure and business traveller market in the country.

“Regional hotel groups have long eyed a greater presence in the Japanese hospitality space and are actively exploring strategic expansion in this market. Embracing innovation solutions like virtual inspections further reinforces the attractiveness of the country and the desire to gain a more immediate foothold in Japan,” says Charlie Macildowie, Senior Vice President, Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group.

Upon the transaction completion, the hotel will be rebranded as the Park Hotel Kyoto, representing the second hotel in Japan for the Singapore-based group. Significantly, the city is largely dominated by domestic Japanese brands and the arrival of Park Hotel Group will provide a differentiated offering for the growing number of international visitors to Kyoto.

JLL Hotels & Hospitality Group expects more activity in the Japan hotel market before the end of 2020. In further evidence of the liquidity of the Japanese real estate market, the firm expects to close one further cross-border transaction in the near-term and is currently marketing a freehold hotel opportunity in Osaka that has attractedstronginterestfrominternationalinvestors.