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GIC in final talks to buy Seibu’s properties in Japan for $1.75 billion: Reports

February 7, 2022

BENGALURU (REUTERS) – Seibu Holdings is in final talks with Singapore sovereign wealth fund GIC to sell about 30 properties in Japan in deals worth about 150 billion yen (S$1.75 billion), according to media reports.

The Prince Park Tower Tokyo, Prince Hotel Sapporo and Grand Prince Hotel Hiroshima are among the properties it plans to sell, the Nikkei reported last Saturday (Feb 5), citing unidentified sources.

Prince Hotels, one of the largest hotel chain operators in Japan, is a Seibu group subsidiary.

A Seibu group company will operate the hotels and other facilities, such as a ski resort and a golf course, after the planned sale, the Mainichi newspaper reported.

The Tokyo-based company said in a statement that nothing has been decided at this point.

Seibu Holdings had initially planned to sell off about 40 assets but decided to hold on to some, according to the reports.

The Covid-19 pandemic has affected Seibu’s main railway and hotel businesses. The company flagged a net loss of 14 billion yen in the year to March this year, making for a second straight year of red ink.

Overseas funds have been aggressively investing in Japanese real estate as the country’s low interest rates give those investments relatively higher returns, the Nikkei said.

GIC declined to comment when contacted by The Straits Times.

The sovereign wealth fund’s possible purchase of Seibu’s properties could add to its other investments in Japan. It jointly developed the Shiodome City Centre office complex, which was completed in 2003, with Japanese real estate company Mitsui Fudosan.

It also acquired the Sheraton Grande Tokyo Bay Hotel near Tokyo Disneyland in partnership with a real estate investment trust in 2017.

GIC has real estate holdings in more than 40 countries. These include prominent assets such as the Azia Centre in Shanghai, Queen Victoria Building in Sydney and the Time Warner Centre in New York City.

Professor Joseph Cherian from the National University of Singapore Business School pointed to the tensions between China and the United States. He said GIC is likely seeking or enhancing investments in other geographies.

“Japan seems to be a favourite investment destination for many these days, including individuals,” he said.

Prof Cherian added that factors such as an expected rebound in the hospitality industry, growth in big data-driven technologies and ESG (environmental, social and corporate governance) considerations have also been at play in GIC’s investments.

Its recent investments include a US$525 million (S$706 million) joint venture with US data centre firm Equinix that will see both parties develop and operate two data centres in Seoul, South Korea.

It is also pumping more than US$1 billion into Shanghai-based greentech company Envision Group, together with private equity firms Sequoia Capital and Primavera Capital.


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