UBS to invest $400m in Japanese hotel sector

UBS Asset Management’s Real Estate & Private Markets business has announced the launch of a $400m new initiative to invest in the Japanese hotel sector.

The iniative will focus on securing value-add and development opportunities in key metropolitan and regional areas such as Tokyo, Osaka, Nagoya, Fukuoka and Hokkaido.

Mitsubishi Corp–UBS Realty, UBS’s joint venture in Japan, will source and manage assets for the strategy through its private fund management arm MCUBS Japan Advisors. MC-UBS has a successful 16-year track record and is one of the largest real estate platforms in Japan.

The new strategy will target assets with potential for refurbishment, repositioning or conversion running alongside UBS-AM’s ongoing investment in development projects where there is a third party operator in place.

Graham Mackie, head of real estate Asia Pacific at UBS-AM, said: “Our investment thesis is underpinned by the clear gap between strong growth in demand for overnight accommodation and the lagging response in supply of new hotel rooms. We see a particular window of opportunity in limited service hotels, a sector that accounted for over 40% of all hotel stays in Japan last year.”

“The strategy is underpinned by long-term structural drivers. This, coupled with the local market sourcing expertise and track record of MC-UBS, makes it a compelling investment proposition for investors.”

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