Many countries around the world are "switching on and off" one after another, and Hong Kong people's "second hometown", Japan, also resumed free travel for foreign tourists today (11th).
But it turns out that when the epidemic first broke out more than two years ago, a Hong Kong-based real estate private equity fund used the character of "others are fearful and I am greedy", looking for "hidden gems (hidden gems)" in Japan, buying bricks for hotel rentals, The annual return is more than ten percent!
The fund, called AB Capital, was founded by Gan Yongkai (Alan), a senior official of Changshi and the son of Gan Qinglin, the "emperor of migrant workers", and two college classmates. So far, it has spent 400 million yuan to acquire 3 hotels in Tokyo and Osaka.
Gan Yongkai accepted an exclusive interview with "Hong Kong 01", detailing the secret of finding "hidden gems", and planned to "add food" in the next year, at least two more hotels were acquired, becoming a new force emerging in the epidemic market in the fund industry.
Gan Yongkai ﹙Alan﹚ established a fund with university classmates, and has spent 400 million yuan to acquire 3 hotels in Tokyo and Osaka.
(Photo by Liang Pengwei)
At the beginning of the interview, Gan Yongkai, a former investment banker, happily introduced AB Capital's business model to reporters when he saw investors, "We are not a hotel operator, but a 'rent collector'. Operators, with a period of 10 to 20 years, have a stable cashflow, and most of the risk (risk) goes to the tenants.”
It sounds simple, but how could it be a fluke after spending more than 400 million yuan in 2 years to sweep into 3 hotels, and the annual rental return of the project exceeds 10%?
Gan Yongkai shared that, from financing in Japan to finding fund investors in Hong Kong, he and his partner went out to talk to each other in person, and it was common practice to have a closed door.
The Japanese market is relatively "closed", and outsiders have to make a breakthrough. In addition to relying on contacts and hiring translators, Gan Yongkai believes that the main thing is to grasp the timing of investment. At the beginning of the outbreak in 2020, he decisively bought the first hotel in Osaka The project became a success, and gradually attracted many local sellers and agents to actively contact, and then in the "epidemic city", two more hotel projects in Tokyo were acquired. The company made a sale at the beginning of the year, and it entered the same search list on the homepage of the nikkei real estate website!”
Locked in the first project of medium-sized hotels in Osaka and Tokyo, "Zhipinghuo"
The first hotel project, injecting a boost for AB Capital, can be regarded as a hero of the times.
Gan Yongkai recalled that, driven by factors such as the Tokyo Olympics, the supply of the Japanese hotel market increased significantly from the end of 2019 to the beginning of 2020. However, due to the impact of the new crown epidemic soon, local banks "recovered from the rain" and greatly reduced the approval of hotel M&A loans, potentially buying Homes can’t borrow money, so the demand for buying hotels has dropped, dragging down local hotel property prices sharply in just two or three months, by as much as 50%. After the collapse, the price will fall all the way, and this is the beginning of the opportunity!"
"Others are fearful and I am greedy", Kam Yongkai began to enter the market "picking gems", but he was not too distracted. The acquisition targets were medium-sized hotels (100 to 150 rooms) in the two major cities of Tokyo and Osaka. The new properties within 5 years of completion will mainly focus on existing projects, targeting the domestic demand market dominated by local business customers; this positioning is based on calculations - it turned out that the Japanese hotel market had collapsed due to the epidemic, and the bank would only deal with, for example, Large U.S. funds have approved loans, and these funds prefer to acquire high-end large hotels. "The opponents who have borrowed money, such as Blackstone and Goldman Sachs, will not buy projects of 10 million or 20 million dollars with you. It is a waste of time for them, so they do not He will fight (compete) with me, and the opponent who wants to fight with me can't borrow money!"
When asked how to find the "hidden gem", Kam Yongkai said that at that time, he relied on contacts and knew that hotels with stable cash flow were available for sale. In addition, he had worked in a bank and had a better understanding of the conditions required for bank loans. The bank obtained a loan to complete the acquisition of the first hotel project in Osaka at a price lower than the construction cost, with a rental yield of more than ten percent.
The Japanese hotel industry needs strong business customers and the "epidemic market" is strong
Kam Yongkai continued to point out that Hong Kong people generally have misunderstandings about Japanese hotels and believe that most of the guests staying in Japanese hotels are foreign tourists. As high as 84% are Japanese locals, and the rest are tourists from abroad, and local demand still exists during the epidemic, "The tourism industry is very poor, there are no international tourists, but the (domestic) business customers are still there. , especially because the company does not have such a large budget, so it will choose a square, white and snowy room, and the rent price is so low.”
Take AB Capital's "Top Shot" hotel project in Shinsaibashi, Osaka as an example. Although the house price during the peak period of the epidemic was only one-third of that before the epidemic, the average monthly occupancy rate was as high as 95%, mainly in Japan. Local company officials.
"It's amazing? Even if it's in Hong Kong, your house price is in the top third, but that doesn't mean that the occupancy rate can be close to 100%!"
But why are the sellers willing to sell a hotel project with stable cash flow?
Gan Yongkai said that there are various reasons. Some sellers are hotel owners, not operators, and they have to cash out because of their own reasons. Some sellers are medium-sized listed companies with low capital turnover needs, but they sell properties flat to make larger leveraged investments. More projects; and some sellers need to rectify their assets and sell non-core businesses when they can't see when the epidemic will end.
Japan's domestic demand has rebounded. From June to July this year, the overall occupancy rate of Japanese hotels has rebounded to over 60%, with Tokyo as high as 80 to 90%.
(AP)
Optimistic about the prospects of the Japanese hotel industry, looking for acquisitions in the next year
After nearly three years, many people are gradually seeing the dawn of the end of the epidemic.
Kam Yongkai is very optimistic about the development prospects of the Japanese hotel industry, because even before the relaxation of the epidemic quarantine measures, despite the lack of support from international tourists, the overall occupancy rate of Japanese hotels has rebounded to more than 60% from June to July this year, with Tokyo as high as 80 to 90%, and housing prices are also recovering. It is expected that there will be further recovery after the quarantine policy returns to normal, coupled with the government’s move to recruit Valley tourism.
He took the hotel owned by the company as an example. The original occupancy rate had reached 95%. After the implementation of the 0+3 quarantine measures in Hong Kong, all the hotel reservations were full, and the room price has recovered a lot. , depending on the tenants earn money to pay the rent, and after the market responds, they will have more customers, so in theory there should be no problem.”
As for whether the market recovery will lead to an increase in hotel supply, there will be more competitors in the same industry, which will put pressure on hotel asset prices or housing prices. Gan Yongkai said that he is not worried, because the purchase prices of the existing three hotels are all close to the cost price. And more peers join in, which will help it find potential buyers at the right time. "The selling price may be high!"
At present, AB Capital's investors, including well-known real estate family consortiums from Hong Kong and some well-known foreign investors, have grown to a total of 8 Hong Kong and Japanese teams, and have obtained the No. 9 asset management license from the Securities and Futures Commission.
Gan Yongkai revealed that he plans to acquire two more hotels in the next year. He will also pay attention to non-hotel property investment opportunities, but he will still focus on the Japanese market so as not to waste its inherent advantages.
Indeed, there is a good start. In this treasure hunt, Gan Yongkai is not in a hurry to advance, "We grow so slowly, because we are good at Picky (choose), the most important thing is to be careful, the threshold is too big (step) will fall. !]
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