Morgan Stanley Buys Japanese Hotels for $2.4B

TOKYO-Citing faith in the country’s rebounding economy, a fund managed by Morgan Stanley has acquired 13 hotels in Japan owned or leased by All Nippon Airways. The transaction involves about 5,000 rooms and is valued at $2.4 billion, making it the priciest portfolio disposition ever in the Asia Pacific’s hospitality sector, according to brokers at Jones Lang LaSalle Hotels.

“This sale underlines the strength of the region’s capital markets, and in particular, investors’ desires for real estate in the world’s second largest economy,” says JLL managing director Scott Hetherington. Based in Asia, Hetherington negotiated the transaction in tandem with EVP Tomohiko Sawayanagi from the Japan office. Marquee assets now owned by Morgan Stanley include the newly cast ANA InterContinental Tokyo and the Manza Beach Hotel & Resort.

The deal fits into Morgan Stanley’s global hotel investment strategy, company officials say in a release announcing the agreement. “This transaction highlights Morgan Stanley’s continued long-term commitment to investing in Japan and optimistic outlook for the nation’s economy and hotel industry,” adds the release. The hotels will be operated under an existing long-term management contract with IHG ANA Hotels Group Japan, a joint venture company started by ANA and InterContinental Hotel Group in December.