Japanese railway transportation company to sell 8 hotels to American investment fund

By admin Jun 27, 2022 #Investment

The Japanese railway company, Kintetsu Group Holding, planned to sell 8 hotels in Osaka and Kyoto to the American investment fund Blackstone Group for about 60 billion yen.

Kintetsu’s financial results were negatively affected by a decrease in the number of passengers using its rail transportation business due to the coronavirus pandemic. The Japanese holding company intends to improve its financial situation by selling hotels, in addition to previously announced measures, such as layoffs and sales of office buildings.

The hotels for sale are the Kintetsu Universal City Hotel, located near the Japanese branch of Universal Studios in Osaka, and the Miyako Kyoto Hachijo Hotel. After the implementation, the holding will lease and continue to manage hotels, retaining the current names of hotels and staff.

However, the Japanese railway company will retain ownership of other hotels, including the resort hotel in Mie Prefecture in the Ise-Shima region and the Osaka Marriott Miyako Hotel.

Kintetsu’s sales for the first 9 months of fiscal year 2020 decreased by half compared to a year earlier. The net loss of the holding amounted to 35.4 billion. yen as opposed to a profit of 31.3 billion. yen in 2019. The number of hotel guests has sharply decreased due to the COVID-19 pandemic.

Blackstone is one of the largest investment funds in the world. He has extensive experience in investing in real estate. In January, the American fund bought a house rental business from Isetan Mitsukosi Holding.

This transaction means a change in Kintetsu’s strategy, in which attention is mainly focused on investing in assets that have proved relatively resistant to the effects of COVID-19, for example, such as residential real estate and logistics facilities. The Blackstone Group’s purchase of hotels suggests that the fund hopes to restore demand in hotels thanks to the spread of vaccines.

By admin

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