The joint venture will allow Shinhan’s clients to benefit from Odyssey’s Japan Hospitality investment strategy, which includes seeking investments in boutique hotels, Ryokan's (Traditional Japanese Inns) and Machiya's (Traditional Japanese Townhouses) in the Kansai region and other areas of Japan. The investment model is to acquire, re-position and operate. By deploying a value-add strategy, Odyssey aims to increase the value of the assets acquired both at the asset level and the operational level. Odyssey’s goal is to increase the value of the underlying assets through a combination of property enhancements and improving the operational efficiencies of the underlying assets.
On the back of its strong and stable corporate governance and financial structure, Shinhan Investment Corp is fast emerging as a leader in Korea’s securities industry and provides securities trading, wealth management, and investment banking services, mergers and acquisitions, investment trusts, and corporate financing services. Shinhan Investment serves clients worldwide and is a subsidiary of Shinhan Financial Group, the second largest Bank in South Korea. Shinhan is, historically, the first bank in Korea, established in 1897 and now boasting more than 10,000 employees with more than US$260 billion in total assets.
Coinciding with the partnership between Odyssey and Shinhan is the initial acquisition of an attractive boutique hotel in Kyoto, Hotel Owan with the closing completed on the Friday 26th of October.
The Owan Hotel. Image Supplied: Odyssey Capital Group
Kyoto is the historical capital of Japan and, as a result, many of Japan’s greatest entertainers, artists, chefs, designers and architects have resided and honed their craft in and around the city.
Our boutique hotel asset embodies Japanese traditional culture and combines traditional, historical, Kyoto-based design and art motifs with modern and funky, boutique construction. Hotel Owan has 19 rooms which spread across 4 floors and comprise 8 wholly unique styles to cater to all types of affluent taste, whether they be for a room that includes tatami floor space, or one fitted with spacious, family-sized, double bunk beds or sleek and minimalist rooms for couples. With traditional Kyoto crafts, such as Nishijin fabric, and delicately featured interiors, you can feel an authentic Kyoto sense of beauty during your stay.
The appeal for local and foreign guests is well established as Hotel Owan has operated at an occupancy rate above 80% since it's opening in 2017 and frequently experiences periods of 100% occupancy with consistent, ubiquitous, rave reviews on its quality of construction and design, it’s feel and styling and its central location and service.
Odyssey’s Japan Real Estate investment team, led by Christopher A. Aiello, was able to acquire the asset at a below market price and felt that current market demand will allow for increasing Average Daily Room Rates (ARD’s) by 20% to 25% over the next 12 months. Odyssey also plans to add concierge service upgrades and also employ a focused and upgraded digital marketing and direct bookings strategy.
The Managing Director of Odyssey Japan CRE, Christopher Aiello said, “We are excited to have completed the acquisition of this wonderful boutique hotel today. We have been able to secure this asset over other bidders due to the long term vision we have for the Japanese Boutique Hospitality industry, the strength of the Odyssey team and our seasoned relationships in Japan. We were able to secure a very attractive debt package for this acquisition from Mitsublishi UFG, one of the leading banks in Japan with a LTV ratio of 65%, non-recourse debt, and with an annual cost of 1.6% pa.”
Odyssey has long-term working relationships with the top leading individuals and firms in the Japanese commercial real estate and hospitality market and these partnerships include our panel banks, trust institutions, local asset managers, legal counsel, tax specialists and accountancy professionals.
The Odyssey CRE team commenced operations in early 2017 in Japan, and its well established and deep local presence, networks and insights allowed for the identification of the best and most appropriate real estate opportunities for the Odyssey Japan Boutique Hospitality Fund. Since this time, the Manager has reviewed more than 50 assets and has built up a robust pipeline.
The Odyssey Japan Real Estate investment team looks forward to providing our valued clients with more unique and exciting opportunities in what, we believe, will be one of the most successful Japanese hospitality investment projects to date. Please contact Odyssey, should you be interested in investing in Japanese real estate.
Odyssey Asset Management Limited
Odyssey Asset Management Ltd, a sister company to the Odyssey Capital Group, is a Hong Kong SFC 1, 4 & 9 licensed company. The Japanese CRE team is headed up by Christopher A. Aiello, and also includes Alex Walker, Daniel Vovil and Sam Luck.
Odyssey Capital Group Ltd is Asia’s leading independent Alternative Asset Manager that provides differentiated and bespoke investment solutions across multiple asset classes, including asset management, real estate, private equity and hedge funds. The Firm’s primary focus is to seek out undervalued investment opportunities to co-invest with its clients.
The Odyssey team comprises over 30 experienced executives, asset managers, lawyers, private bankers, trust & tax planning specialists and experienced investors with over 400 years of combined financial and operational experience across the Asia Pacific, Europe and North America.
For more information about Odyssey Capital Group Ltd, phone or email Daniel Vovil via the contact details listed below.
Source: Odyssey Japan Hospitality Management Ltd 28 Oct 2018.
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