Osaka’s Rihga Royal Hotel will be acquired by BentallGreenOak (BGO), a Canadian real estate investment firm. Although the price was not disclosed, it is estimated to be somewhere around 50 billion Yen (approx. US$385 million). Operations by Royal Hotel are expected to continue post-sale.
The transfer of the trust beneficiary rights to the building and land is expected to take place in March. BGO is also acquiring a 30% stake in Royal Hotel, making it the largest shareholder. There is a growing trend in the sale and lease-back of some of Japan’s major hotels as they seek to adopt an asset-light model in the wake of the pandemic.
With over 1,000 rooms, this is one of the leading luxury hotels in Osaka. The hotel opened in 1965 and was the hotel of choice for visiting dignitaries. The Crown Prince and Princess stayed there during the 1970 World Expo. The basement arcade was filled with luxury brands and services and was considered ahead of its time. The hotel was designed by Isoya Yoshida, an architect noted for his immaculate blending of traditional Japanese and modernist architecture.
After the sale, a further 13.5 billion Yen (US$104 million) will be spent refurbishing the hotel in preparation for Expo 2025. The upgrades are expected to more than double the current average room rate.
BGO has already invested over 700 billion Yen in real estate in Japan. In 2019, the fund acquired the Osaka head office of the Takeda Pharmaceutical Company for an estimated 50 billion Yen, and acquired the former Avex headquarters in Tokyo in 2020 for an estimated 72 billion Yen.
Sources:
The Nikkei Shimbun, January 20, 2023.
The Yomiuri Shimbun, January 20, 2023.
The Sankei Shimbun, January 20, 2023.
