News & Insights
NEWS & INSIGHTS
Salter Brothers Research: Japan Hospitality
November 2024
Identified as a premier real estate opportunity in Asia Pacific, Salter Brothers Research shares insights into Japan’s high performing hotel sector.
Strong Fundamentals
Japanese hotels are a fundamentals-driven investment opportunity. A large and heavily transacted market, the sector is supported by a strong base of domestic demand and fast-growing pool of international inbound.
Revenue Drivers
A strong base case is supported by a number of realistic upside revenue drivers. Prime exposure to fast-growing APAC outbound markets and a limited pipeline of future supply implies an encouraging supply-demand imbalance.
Growth Spurt?
Demand and performance growth has normalised globally but remains elevated in Japan. Japanese outperformance continues a trend of above average demand growth from the decade prior to COVID-19 border closures.
Domestic Decline
Japan’s hotels are exposed to the forecasted domestic population decline, with a considerable domestic share of the tourism market. This highlights the need for strategically positioning any investments towards international customer growth.
Sector Performance: Widespread Growth
The remarkable performance of Japanese hotels has been felt across all national markets and asset classes. Widespread growth has enabled diverse approaches, with investors and hotel chains pursuing strategies spanning from budget to luxury, across both urban and regional assets.
First Look: Retreats
The traditional Japanese Ryokan sector is experiencing notable investor interest. The unique features of the sector offer both opportunities and challenges for overseas investors.
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Salter Brothers Opens Office in Japan
Building on the growth of its Asian footprint, Salter Brothers has now opened an office in central Tokyo, Japan, complementing its existing office in Singapore.
The Japan office has both investment and asset management team members and will be led by Rahul Ghai, Managing Director for Asia.
The office will be situated at Roppongi Hills Mori Tower.
Salter Brothers recently announced a strategic partnership with TC Hotels & Resorts Beppu Corporation, a wholly owned subsidiary of Tokyo Century Corporation, to pursue hotel and hospitality opportunities in Japan. The partnership covers both existing and new assets, allowing Salter Brothers to apply its experience to the Japanese market in refurbishing, rebranding and repositioning existing assets with international operators. Salter Brothers has subsequently assumed asset management of ANA InterContinental Beppu Resort & Spa.
Paul Salter, Managing Director of Salter Brothers, stated “We are fully committed to Japan and Asia. This is the right time to open an office in Japan and Rahul’s firsthand experience on the ground and network throughout Japan will play a pivotal role to Salter Brothers’ shape and future in the region.”
Rahul joined Salter Brothers in November 2023 and has been leading the company’s Asian operations. He said that “setting up a local office in Tokyo will better service Salter Brothers’ growing operations and expand our presence in Asia, which is necessary when pursuing value add type strategies.”
View Announcement as seen in HM Magazine online
Global Fund Manager Opens Office in Japan
Press Release | October 16, 2023
Building on the growth of its Asian footprint, Salter Brothers has now opened an office in central Tokyo, Japan, complementing its existing office in Singapore.
The Japan office has both investment and asset management team members and will be led by Rahul Ghai, Managing Director for Asia.
The office will be situated at Roppongi Hills Mori Tower.
Salter Brothers recently announced a strategic partnership with TC Hotels & Resorts Beppu Corporation, a wholly owned subsidiary of Tokyo Century Corporation, to pursue hotel and hospitality opportunities in Japan. The partnership covers both existing and new assets, allowing Salter Brothers to apply its experience to the Japanese market in refurbishing, rebranding and repositioning existing assets with international operators. Salter Brothers has subsequently assumed asset management of ANA InterContinental Beppu Resort & Spa.
Paul Salter, Managing Director of Salter Brothers, stated “We are fully committed to Japan and Asia. This is the right time to open an office in Japan and Rahul’s firsthand experience on the ground and network throughout Japan will play a pivotal role to Salter Brothers’ shape and future in the region.”
Rahul joined Salter Brothers in November 2023 and has been leading the company’s Asian operations. He said that “setting up a local office in Tokyo will better service Salter Brothers’ growing operations and expand our presence in Asia, which is necessary when pursuing value add type strategies.”
Salter Brothers will be making further announcements shortly.
Fund Manager Salter Brothers appoints industry veteran to support their growth plans
Press Release | October 11, 2024
Salter Brothers, a global fund manager, is pleased to announce the appointment of Caterina Nesci as its new Director of Brand & Marketing to support its strategic growth initiatives across Asia Pacific.
With $4 billion in assets under management and offices and operations in Australia, Singapore and the United States of America, Salter Brothers is committed to cementing its position as one of Australasia’s leading alternative asset managers, with its “value add” approach to investment in the region.
Paul Salter, Managing Director of Salter Brothers commented, “We are pleased to welcome Caterina to our team. This is an important appointment to support our growth plans in our key markets and sectors, where Caterina already has a demonstrable track record”.
Caterina has more than twenty years’ strategic marketing experience, having lived and worked in Australia, London, Hong Kong, and Italy. Her previous appointments include Head of Marketing & Communications as well as Director of ESG & International Partnerships at La Trobe Financial, where she dedicated more than 12 years and was responsible for assisting the company grow from $1.2 billion to over $16 billion in assets under management. Importantly, she held a number of senior marketing roles in Asia and is well versed in executing strategies in these markets.
Caterina said, “I am thrilled to join Salter Brothers, because of the company’s potential growth and opportunities in Australia and Asia. I very much look forward to assisting the company build its brand and market position as a leading global fund manager in alternative investments.”
Salter Brothers acquires iconic Bannisters luxury retreat hotels
Press Release | October 08, 2024
Salter Brothers is delighted to announce the acquisition of the Bannisters portfolio, a collection of iconic boutique hotels located in New South Wales, Australia.
The Bannisters portfolio comprises three unique hotels that provide a luxury experience along with breathtaking waterfront views. The acclaimed resorts include Bannisters by the Sea (34 guest rooms) and Bannisters Pavilion (33 guest rooms), both based in Mollymook, New South Wales as well as Bannisters Port Stephens (78 guest rooms) based in Port Stephens, New South Wales.
The management of these hotels will be undertaken by Salter Brothers Hospitality with the support of an existing skilled team of 150 full-time staff members.
In response to the acquisition, Paul Salter, Managing Director of Salter Brothers, stated, “We are pleased to have secured the Bannisters portfolio as a valuable addition to our Hotel Retreat portfolio. The current supply of new hotel accommodation is being hampered by rising construction costs, particularly for luxury venues in regional locations. These are distinct assets positioned in unrepeatable ocean view settings and boast a reputation of consistently achieving high occupancy levels.”
“I would like to thank our advisors MinterEllison, Napier and Blakeley and EY for assisting on the transaction, alongside Savills for the vendor.”
Alice O’Hara, CEO, of Bannisters Hotels added “Bannisters has become an icon of Australian boutique hotels, and I’m thrilled to see our brand’s growth under Salter Brothers Hospitality. There are exciting opportunities ahead, and we are united in our commitment to exceptional hospitality. When our guests return, they’ll be greeted by the familiar faces and unforgettable experiences they love.”
The acquisition is expected to be completed by the end of this year.
Fund manager snaps up coastal hotels with famed Rick Stein restaurants
By Larry Schlesinger | Oct 8, 2024
Read full article at AFR online
Busy hospitality fund manager Salter Brothers has bolstered its portfolio of boutique country lodges and luxury coastal retreats after snapping up three Bannisters hotels in Mollymook and Port Stephens on the NSW South and North Coast for over $100 million.
The acquisitions include two famous seafood restaurants in Mollymook and Port Stephens, which are operated by celebrity UK chef Rick Stein within the hotel complexes alongside a number of pubs, bars and spas.
It comes as Salter Brothers works on plans to potentially float a separate $2 billion portfolio of mostly IHG-operated CBD hotels including properties such as the five-star Intercontinental Rialto Melbourne, Crowne Plaza Coogee and voco Gold Coast.
The fund manager will add the three Bannisters hotels to its unlisted Hospitality Retreat Fund, which currently houses 13 properties and 407 guest rooms including six Spicers Retreats resorts (and the Spicers Retreats brand), which were acquired in 2022 for about $130 million from Flight Centre co-founder Graham Turner and his wife, Jude.
Other properties in the fund include Bowral’s Milton Park Country House & Spa in the NSW Southern Highlands (acquired for about $20 million last year), Echoes Boutique Hotel Blue Mountain and The Convent Hunter Valley Luxury Boutique Hotel.
Bannisters was founded in 2003 by media entrepreneur Peter Cosgrove (the former chairman of HT&E Limited, which rebranded as ARN Media last year) when he opened his first hotel, Bannisters by the Sea, in Mollymook after renovating an old motel.
In 2009, he put Bannisters and the quiet coastal village of Mollymook on the culinary map after he enticed Rick Stein to open his first restaurant outside the UK at the hotel.
Bannisters Pavilion opened just down the road in 2015 and in 2018 Mr Cosgrove opened Bannisters Port Stephens in what was previously the Salamander Motel.
Through various entities, Mr Cosgrove owns the two Mollymook hotels, while ownership of the Port Stephens hotel is split three ways between Mr Cosgrove, and Sydney real estate agents Chris Herbert and Niall Chang, directors of Richardson & Wrench Bondi Junction.
Salter Brothers managing director Paul Salter said the three hotels were great assets in stunning locations that would leverage off the Bannisters brand and tap into the “drive market” – sought-after coastal and country locations within two to three hours of a major CBD.
“The drive market is what we are targeting [for this fund],” Mr Salter said.
“These hotels trade in the high 90 per cent occupancy range, sometimes even at 100 per cent. They are great assets that trade really well. They are popular as romantic getaways, for staycations and for weddings and events.”
Mr Salter declined to comment on the price paid for the Bannisters hotels or the firm’s mooted IPO of its CBD hotels.
Well-placed sources indicated that the three hotels sold for more than $100 million.
Once the deal settles by the end of the year, Salter Brothers Hospitality will manage the three hotels, with the support of the existing Bannisters’ team of 150 full-time staff.
The off-market deal was negotiated by Savills (on behalf of the vendor) alongside MinterEllison, consultants Napier & Blakeley and Ernst & Young.
“Bannisters has become an icon of Australian boutique hotels, and I’m thrilled to see our brand’s growth under Salter Brothers Hospitality,” said Alice O’Hara, CEO of Bannisters Hotels.
“There are exciting opportunities ahead, and we are united in our commitment to exceptional hospitality. When our guests return, they’ll be greeted by the familiar faces and unforgettable experiences they love.”
Incoming owner Salter Brothers has $4 billion of assets under management including more than 40 hotels. Its other investments span property development, private credit, immigration investment and technology.