Mitsui to acquire stake in landmark hotel

Japan’s Mitsui Real Estate is paying Y89.2bn ($777m) to buy a 33.2 per cent stake in the Imperial Hotel, a landmark hotel in central Tokyo where the former princess Sayako, daughter of the Emperor and Empress, held her wedding two years ago.

Japan’s largest real estate developer will acquire the stake from a developer owned by Cerberus, the US private equity firm, becoming the single largest shareholder in the hotel.

The deal, unveiled Friday, highlights the intensifying competition for prime real estate in Japan, where land prices have seen sharp rises.

The Imperial, which boasts a 117-year history and the custom of the Imperial family, has a strong brand and enviable location.

It sits across the street from one of Tokyo’s best-known parks and a short distance away from the Ginza shopping district as well as the Marunouchi business and financial centre.

The hotel still houses parts of its former building, which was designed in 1916 by Frank Lloyd Wright and torn down in 1970.

However, the hotel faces growing competition as several new luxury hotels have opened in succession in Tokyo, including the Conrad, the Four Seasons, the Peninsula and the Ritz Carlton.

Hiromichi Iwasa, president of Mitsui Real Estate, on Friday indicated that the group aimed to redevelop the hotel and its neighbouring area in Hibiya.

Mitsui is paying Y8,750 per share, a premium of 10 per cent over Imperial Hotel’s closing price yesterday.

However, shares in the Imperial have risen 42 per cent in the past week, following Japanese media reports that a deal was imminent.

The sale marks another exit for Cerberus, the US private equity group, which took a 65 per cent stake in Kokusai Kogyo three years ago for an undisclosed sum. Kokusai Kogyo will sell part of its 39 per cent stake in the Imperial to Mitsui.

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