Best Western Hotel Fino Tokyo Akasaka in Minato ward (Image: Best Western)
Nomura Real Estate Master Fund has agreed to buy a hotel in Tokyo’s upscale Akasaka district from Japanese developer Ichiken for JPY 8.7 billion ($55 million), picking up the 87-key property at a 20 percent discount to its appraised value.
The REIT sponsored by Nomura Real Estate Development is paying JPY 100 million ($626,000) per key for the Best Western Hotel Fino Tokyo Akasaka, which was appraised at JPY 10.9 billion as of July, according to a Tuesday filing. The asset’s appraisal net operating income of JPY 385 million translates to a 4.4 percent yield on the acquisition price.
Master Fund’s manager expects the six-year-old hotel’s rent, which is entirely tied to operating performance, to rise with room rates and occupancy as inbound travel grows. “We believe this will contribute to enhancing the fund’s profitability and the value of the fund’s portfolio,” it said.
The parties are scheduled to sign the purchase agreement on Thursday and complete the transaction on 1 September, with Master Fund using cash on hand for the purchase. Ichiken carries the asset at JPY 5.3 billion, or 39 percent less than the sale price, creating a gross spread of JPY 3.4 billion before fees, according to the listed developer’s disclosure.
Tourism Upside
Completed in March 2020, the 13-storey hotel in Minato ward spans 2,385 square metres (25,672 square feet) of floor area. The property is a three-minute walk from both Akasaka and Akasaka-mitsuke metro stations, providing direct links to Tokyo’s business and leisure districts.
Nomura Real Estate Master Fund executive director Shuhei Yoshida
The Best Western has 22 moderate double rooms, 53 superior doubles, 11 superior twins and one accessible deluxe twin, with double rooms making up 86 percent of the total. Amenities include in-room workspaces and Wi-Fi, as well as a restaurant serving buffet breakfast.
At JPY 100 million per room, the agreed value is equivalent to JPY 3.65 million per square metre. The sale price is nevertheless JPY 2.23 billion below the appraisal, which was calculated using a 3.4 percent capitalisation rate and a 3.2 percent discount rate.
Polaris Holdings operates the property under a lease arrangement with rent calculated as a fixed percentage of gross operating profit. The listed hotelier, controlled by Star Asia Group, had 124 properties comprising 17,476 rooms in operation or under development as of June and also manages two Koko Hotel assets owned by Master Fund.
International travellers account for 95 percent of the Akasaka property’s guests and stay an average of 3.7 days, according to the REIT’s supplemental presentation. Minato recorded more than 8 million overnight stays in 2024, including 3.7 million by overseas visitors, with the ward targeting more than 9 million stays in 2026.
The acquisition will lift Master Fund’s hotel holdings by 31 percent to JPY 37 billion across nine properties, raising the sector’s portfolio weighting to 3.3 percent from 2.6 percent. The trust’s Greater Tokyo hotel exposure will jump nearly fivefold to JPY 11.1 billion from JPY 2.4 billion.
Ichiken had announced the planned disposal on 7 August without identifying the buyer or price. The contractor-developer raised its full-year operating profit forecast by 29 percent to JPY 11 billion and its net profit target by 30 percent to JPY 7.3 billion, citing improved construction earnings and a hotel sale price that exceeded its earlier assumptions.
Key Changes
For Master Fund, the purchase continues a period of portfolio rotation after the REIT sold eight apartment assets to Integral Real Estate for JPY 10.8 billion in March 2025. The properties changed hands at a 35 percent premium to their combined book value of JPY 8 billion.
The disposals included the Prime Urban Izumi apartment block in Nagoya and Prime Urban Meguro Mita in Tokyo, together with six residential assets in Tokyo, Chiba and Sendai. Integral acquired the set for its maiden value-add fund as part of a JPY 20 billion, 10-property investment programme.
Master Fund returned to the acquisition trail in March of this year with the JPY 8.9 billion purchase of restaurant building Gems Tachikawa and apartment property Proud Flat Kiyosumidori from its sponsor. The two Tokyo assets were both completed in 2024.
The Best Western deal will lift Master Fund’s total portfolio to JPY 1.1 trillion ($6.9 billion) by acquisition value across office, retail, logistics, residential and hotel properties, with 83.5 percent of the holdings concentrated in Greater Tokyo.