Nippon Hotel & Residential REIT to Acquire Eight Properties for JPY 19.7 Billion, Expanding Portfolio by 40%

Nippon Hotel & Residential Investment Corporation announced on November 12, 2025 that it will acquire eight domestic properties for JPY 19.7 billion. The closing is scheduled for December 2, 2025. Following the transaction, the REIT’s asset size will increase by roughly 40%, from JPY 49.2 billion to JPY 68.9 billion. The acquisition is part of an external growth strategy that aims to reduce concentration in Ooedo Onsen facilities while combining sponsor APA Group’s support with the REIT’s own sourcing network.

The acquisition pipeline consists of four business / city hotels (total acquisition price of JPY 12.2 billion) and four accommodation facilities (total acquisition price of JPY 7.5 billion. Three APA Hotel properties will be acquired from APA Group and are located in Osaka (JPY 4.85 billion), Fukuoka (JPY 3.93 billion) and Matsuyama (JPY 1.2 billion). The lease structure combines fixed base rent with variable rent equal to 10% of annual gross revenue above a pre-agreed threshold, allowing the REIT to directly capture upside from hotel revenue growth.

Post-acquisition, the share of Ooedo Onsen facilities in the portfolio will fall from 59.3% to 42.4%, while business / city hotels will increase to 27.3% and accommodation facilities to 30.3%. The REIT is targeting a more diversified income base by lowering exposure to a single tenant and broadening asset types.

Within the accommodation segment, the REIT will acquire four assets including Sol Plaza Sakai in Sakai City (JPY 3.52 billion, 169 units). Three of the four assets are being sourced through APA Group’s bridge investment function.

In connection with the transaction, Mizuho Bank will join the lending syndicate as co-arranger, giving the REIT a two-megabank lender formation. New borrowings will be raised on a three-year term at an interest rate of 0.600%, improving from the previous 0.800%. The tighter funding spread reflects lender recognition of progress on portfolio expansion and diversification. For the fiscal period ending May 2026, forecast distributions per unit are JPY 2,008, representing a 2.0% increase from the prior forecast.

Key Facts

• Business / City Hotels (4 properties)

  • Property Name: APA Hotel 〈Namba Kita Shinsaibashi-Ekimae〉 and three other properties

  • Acquisition Price: Total JPY 12.2 billion

  • Location: Osaka City, Osaka Prefecture; Fukuoka City, Fukuoka Prefecture; Matsuyama City, Ehime Prefecture; Atsugi City, Kanagawa Prefecture

  • Completion: 1991–2007

  • Number of Floors: 10–11F

  • Gross Floor Area: approx. 568–1,536 tsubo (approx. 20,200–54,700 sq. ft.)

  • Number of Keys: 109–165 rooms

• Accommodation Facilities (4 properties)

  • Property Name: T’s garden Higashi-Ogu; Hestia Chiba-Ekimae; Park Square Kitamatsudo; Sol Plaza Sakai

  • Acquisition Price: Total JPY 7.5 billion

  • Location: Arakawa Ward, Tokyo; Chiba City, Chiba Prefecture; Matsudo City, Chiba Prefecture; Sakai City, Osaka Prefecture

  • Completion: 1994–1998

  • Number of Floors: 5–15F / B1

  • Gross Floor Area: approx. 703–4,580 tsubo (approx. 25,000–163,000 sq. ft.)

  • Number of Units: 48–169 units