Why a U.S. investor is bullish on Japan's hotel scene

U.S. alternate asset manager Fortress Investment Group, which has already invested an estimated $180 million from a new fund into Japanese hotel assets, is considering further investments in the sector despite increases in prices.

According to the South China Morning Post, Fortress completed fund-raising for a $1.1 billion Japan-dedicated reserve in October. Of this, Thomas Pulley, CIO at Fortress Investment Group (Japan), estimates that $180 million has been invested in hotels.

Fortress sees "long-term growth potential" and more opportunities in hotel investments in the future, given a push by the government to boost tourism. Thanks to relaxed visa regulations and a weak yen, Japan has attracted a record 16 million international visitors so far this year, already beating the previous full-year record of 13.4 million visitors set last year, according to the Japan National Tourism Organization.

FREE DAILY NEWSLETTER

Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

Growing demand for hotel rooms has pushed hotel prices higher, intensifying competition. But Pulley said that Fortress still sees opportunities in Japan's hotel sectors, with many properties "in need of both renovation and capital improvements as well as professional management."

Fortress purchased several troubled hotels after the 2008 financial crisis. It now owns include Sheraton Grande Tokyo Bay Hotel near the Tokyo Disney Resort as well as Rihga Royal Hotel in Kyoto. 

Suggested Articles

The three stages of development in Europe’s pipeline are experiencing double-digit increases year over year and are at or near record highs.

Celebrating the hotel company’s 45th year and his 80th on the planet, the owner/operator—and philanthropist—embodies a "hospitality heart."

The Hyatt Centric Reykjavík will not only be the first Hyatt-branded hotel in Iceland, but will be the company's debut the Nordic region as a whole.