Goldman's Hotel Binge

Goldman Sachs is preparing to list Japan's first hotel REIT, through its subsidiary Japan Hotels and Resorts. The company obtained a REIT licence in July, and the Nikkei reports that the listing is due by the end of 2005. Their portfolio includes the Shin-Urayasu Oriental Hotel (near Tokyo Disneyland in Chiba), The Hotel Nikko Alivila (Okinawa), the Kobe Meriken Park Oriental Hotel, and the Namba Oriental Hotel in Osaka.

The Nikko Alivila was purchased from Sato Kogyo in 2003 for an undisclosed sum. Goldman acquired the other properties in 2003 from ailing retailer Daiei for 45 billion yen, along with one other hotel in Fukuoka. The properties are performing well; for instance, the Kobe hotel has the most banquet functions (over 1,000 a year) among hotels in the region.

Besides these large properties, Goldman has acquired an extensive portfolio of smaller hotels, such as the Kawasaki Nikko Hotel, and Japanese inns, including the respected Izumi-so on the Izu peninsula, and Komaki Onsen in Aomori. Together with the 100-year old Hoshino Resort company, it established a turnaround management company for regional Japanese inns in May (sideline: Hoshino recently opened the breathtaking Hoshinoya hotel in Karuizawa).

Goldman Sachs is also slated to list its golf course unit, Accordia Golf Japan (see my previous post) which it also built by accumulating assets from failed Japanese owners.

Related Story (Bloomberg) : Goldman Plunges Into Japan Spas, Aiming at Golf Redux

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