U.S. buyout firm Bain Capital is reportedly selling part of its Japan hotel assets through a Tokyo-based real estate investment trust initial public offering that may raise nearly 20 billion yen ($190.35 million). According to Reuters, the IPO, which will be managed by Nomura Holdings and SMBC Nikko Securities, will be announced on Friday.
Early last year, Bain acquired Japanese hotel and spa operator Ooedo Onsen Holdings, which operates 31 hotels and spa facilities nationwide, for an estimated $421 million. At the time, Bain said Ooedo-Onsen sales have risen about 30 percent annually since 2007.
Since the acquisition, Bain has reportedly set up a company called Ooedo Onsen Asset Management, which will operate a real estate investment trust named Ooedo Onsen REIT Investment. The REIT will buy some of the properties from Ooedo Onsen Holdings.
Bain is one of many property investors who are taking advantage of investors' demand for higher yields from REITs. Currently, rates in Japan are “ultra-low and even negative.” Japan's REITs offer an average yield of 3.4 percent, compared to the negative yield on a 10-year Japanese government bond.