Through the new venture, Red Planet Japan plans to build hotels across major Japanese city centres, commencing with a 160 room hotel in Hiroshima.
TOKYO, Japan -- Red Planet Japan Inc. announced the formation of a joint venture with funds managed by GreenOak Investment Management K.K., the Japanese arm of GreenOak Real Estate, that will develop Red Planet branded hotels in select city centres throughout Japan.
GreenOak shall invest up to 5 billion yen into the venture, while RPJ shall invest up to 555,555,555 yen and, with non-recourse debt, the venture shall have total capital of approximately 22.2 billion available to finance up to six new hotels in Japan over the next two years.
Through the new venture, Red Planet Japan plans to build hotels across major Japanese city centres, commencing with a 160 room hotel in Hiroshima. Both parties expect to expand the scope of the venture over the following two years to keep pace with the rapidly-growing Japanese travel market.
Red Planet Japan's Chief Executive Officer, Tim Hansing, said, "This partnership enables major expansion of our hotel footprint across Japan's urban centres, solidifying our position as the leading Asian budget hotel chain to meet increasing demand from, above all, the booming tourism surge into Japan. We are particularly pleased to be be able to showcase our guest-facing technology which is transforming the stay experience. None of our competitors have been able to implement anything like this."
GreenOak has operated in Japan since 2010 and has USD 10.6 billion in assets under management worldwide. Tokyo-based GreenOak Partner, Dan Klebes, commented, "Through this venture, GreenOak seeks to invest in a sought-after asset class with a brand which appeals to the regional value-seeking traveller visiting Japan today. The Japanese hospitality market enjoys high occupancy rates and rising rooms rates, providing high yields and substantial asset appreciation. We believe our relationships will assist Red Planet in identifying new opportunities in Japan, and we hope to commit further funds to the budget hospitality sector in an ongoing partnership with Red Planet."
Simon Gerovich, Chairman of Red Planet Japan, commented, "Having created the brand, infrastructure, and technology platform to realise substantial increases in revenues, margin expansion, and profits, we are now accelerating the pace of our roll-out. We regard this venture as the first of a series of asset developments with GreenOak over the coming years. The market is substantial, and growing rapidly, and we are well poised to scale up our presence accordingly."
With the new hotels, Red Planet Japan shall operate 2,500 rooms across Japan and the Philippines, boosting the total number of rooms operating under the Red Planet brand in Asia to 7,452 over the next two years.