Red Planet Japan, subsidiary of Bangkok-based budget chain Red Planet Hotels, has announced a 11.8 billion yen (US$110 million) sale-and-leaseback transaction with Goldman Sachs.
The transaction includes Red Planet’s hotels in Asakusa, Naha and Nagoya as well as a forward purchase of the Susukino Central development project in Sapporo, resulting in gains of nearly 2.6 billion yen.
Under the terms of the transaction, Red Planet has sold ownership rights to the four hotels and simultaneously entered into a lease-and-operate agreement with Goldman Sachs for an initial period of 20 years.
“We anticipate a long and fruitful relationship with Goldman Sachs over the coming years as we recycle capital at competitive cap rates,” remarked Yoshi Ikurumi, CFO, Red Planet Japan.
Red Planet Hotels is reinvesting the sales proceeds into new hotel developments across Japan. The hotel chain has two hotels under construction in Sapporo and seven more in its Japan development pipeline.
According to Tim Hansing, CEO, Red Planet Japan, the transaction will enable the company to “accelerate the roll-out of Red Planet Hotels” in Japan, its “fastest growing market”.
Red Planet Hotels currently owns and operates 29 hotels in four countries.