Flurry of asset sales in Japan as companies affected by Covid-19 strengthen their books


TOKYO — Japanese railroad giant Seibu Holdings reached a deal this month to sell part of its hotel portfolio to Singaporean sovereign wealth fund GIC, becoming the latest in a string of companies to recently offload secondary assets.

This trend has been particularly acute in sectors hardest hit by the prolonged Covid-19 pandemic, such as transport.

It also occurs when conglomerates focus on their core businesses, while seeking to improve their financial position by rationalizing their assets while obtaining funds for future investments. This led to a flurry of activity in a booming deal market.

In a statement on the 150 billion yen (S$1.76 billion) deal, Seibu noted that “asset relief” will help accelerate its post-pandemic growth strategy through ” management reforms to build a more solid financial and commercial structure in response to possible recurring risks”.

The GIC deal comes a month after Seibu sold its subsidiary Seibu Construction, which builds single-family homes, condominiums and resorts, to Japanese engineering firm Mirait Holdings for 38 billion yen.

Thanks to the sale to GIC, which is expected to be finalized in May when a contract is signed before the official transfer of assets in September, Seibu is expected to reap a profit of 80 billion yen, after deducting costs incurred.

The deal involves the sale of 31 properties out of Seibu’s global portfolio of 76 facilities, with GIC taking ownership of 15 hotels, 10 golf courses and six ski resorts.

They include the luxurious five-star Prince Park Tower Tokyo, next to the famous Tokyo Tower, as well as the Naeba Ski Resort, popular among young people in winter for its powder snow and in summer for the Fuji Rock Festival, which offers usually more than 200 Japanese and international musicians and ranks as Japan’s largest outdoor music event.

Seibu will continue to operate the facilities sold to GIC.

The Japanese company retains properties such as the flagship Shinagawa Prince Hotel as well as its hotel in popular day-trip destination Karuizawa and its adjacent golf courses.

The Prince Hotel chain is one of Japan’s legacy brands, having started when Seibu founder Yasujiro Tsutsumi purchased land from impoverished imperial and noble families after World War II.


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