A tourism boom in Japan, bolstered by the return of Chinese visitors, and the highest level of inflation in four decades are fueling a boom in hotel investment in the island nation.
Foreign investors have spent $2 billion on hotel deals in Japan so far in 2023, the most compared with any other sector in Asian commercial property, according to MSCI Real Assets. That’s already more than the $1.4 billion seen for all of 2022.
Compared with before the pandemic, visitors to Japan are spending more. Most of that money is going to lodging and hospitality, according to spending data from the Japan Tourism Agency. After years of deflation, core prices excluding energy and fresh food are increasing at the fastest pace since 1981.
Last month, a consortium formed by Goldman Sachs Asset Management, Abu Dhabi Investment Authority, and Singapore’s SC Capital Partners purchased a portfolio of 27 properties for around $900 million. Canadian private equity firm BentallGreenOak agreed to buy the Ritz-Carlton in Fukuoka this summer, and KKR & Co. and Hong Kong-based Gaw Capital announced a deal for the Tokyo Hyatt Regency in the spring.
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