Red Planet pumps US$194m in Japan expansion through GreenOak JV

Red Planet Nagoya Nishiki

Red Planet Japan (RPJ) will add six new hotels in Japan over the next two years, with an investment of approximately 22 billion yen (US$194 million) through a joint venture with funds managed by GreenOak Investment Management K.K., the Japanese arm of GreenOak Real Estate.

GreenOak will invest up to five billion yen, and RPJ up to 555.6 million yen, with non-recourse debt.

Red Planet Nagoya Nishiki

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 tourism boom Japan is undergoing.

Red Planet Japan’s CEO, 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.”

GreenOak has operated in Japan since 2010 and has US$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.

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 will 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.

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