JHR PURSUES LONG-TERM GROWTH WITH DIVERSIFIED PORTFOLIO OF COMPETITIVE HOTELS
The resurgence of Japan’s tourism boom could happen quickly, perhaps as soon as the country opens up its borders, owing to the pent-up demand from foreign tourists, who were 30 million-strong before Covid-19 struck. The prospect is fuelling continuing investments by Japan Hotel REIT Investment Corp (JHR), Japan’s largest and oldest hotel real estate investment trust (Reit) that owns premium hotel properties located at the heart of the tourism boom – Tokyo Bay, the Osaka/ Kyoto areas, Hokkaido, Okinawa and Fukuoka.
“Our strategy is based on the long-term growth potential arising from Japan’s strategic policy change in the tourism sector and the continuing global digital revolution,” says Hisashi Furukawa, president and CEO of Japan Hotel REIT Advisors (JHRA), the asset manager responsible for acquiring superior properties and improving the quality of JHR’s portfolio.
The portfolio size has ballooned to 363.5 billion yen (HK$24.35 billion) as of December 15 last year consisting of 41 hotels with a total capacity of 11,279 guest rooms, or an average of 275 rooms per hotel. The portfolio features distinguished international chains such as the Hilton and Sheraton along with the domestic Oriental Hotel brand owned by JHR.
Over the past nine years, JHR has gained the trust and confidence of institutional investors by consistently executing a long-term strategy to raise portfolio returns and annual dividends. About 45 per cent of JHR shares are held by international institutional investors, more than any other Reit in Japan.
The company is pursuing a rebranding strategy highlighting its own Oriental Hotel brand. Amid harsh pandemic conditions, large-scale cost restructuring has also taken place with the appointment of Hotel Management Japan (HMJ), a group company of JHRA, and its subsidiaries. The HMJ group leases 16 properties that operate more efficiently with shared human resources and back offices
In line with its long-term outlook, JHR performs continuous renovation work to maintain top ratings of its hotel properties. “Renovating is very much part of JHR’s sustainability initiative because it is more environmentally friendly than a demolition or a new-build. At the same time, it allows us to raise property values through revenue enhancement and energyefficient operations. It benefits all stakeholders,” says Makoto Hanamura, director of the board, managing director and head of the finance and planning division.
JHR’s sustainability policy reverberates across its properties, resulting in consecutive “Green Star” ratings since 2018 on GRESB. Furthermore, JHR was selected as sector leader of the overall Asia hotel sector in GRESB last year.