The estimated number of overseas visitors to Japan reached a record high 31.19 million in 2018, up 8.7 percent from the previous year and rising for the seventh straight year, the tourism minister said Friday.
Land, Infrastructure, Transport and Tourism Minister Keiichi Ishii credited the growth to the relaxation of visa requirements for travelers from Russia, India, the Philippines and other countries, as well as promotions overseas.
“The government’s efforts have brought the desired result,” Ishii said. “There is a sign of us hitting the 40 million mark on the horizon.”
Odyssey Asset Management Ltd, a sister company to the Odyssey Capital Group, is a Hong Kong SFC 1, 4 & 9 licensed company. The Japanese CRE team is headed up by Christopher A. Aiello, and also includes Alex Walker, Daniel Vovil and Sam Luck.
Odyssey Capital Group Ltd is Asia’s leading independent Alternative Asset Manager that provides differentiated and bespoke investment solutions across multiple asset classes, including asset management, real estate, private equity and hedge funds. The Firm’s primary focus is to seek out undervalued investment opportunities to co-invest in with its clients.
The Odyssey team comprises over 30 experienced executives, asset managers, lawyers, private bankers, trust & tax planning specialists and experienced investors with over 400 years of combined financial and operational experience across the Asia Pacific, Europe and North America.
For more information about the Odyssey Japan Boutique Hospitality Fund, phone or email Daniel Vovil via the contact details listed below.
The Japan Boutique Hospitality Fund got off to a successful and promising start in 2018 and the fourth quarter was a busy period in terms of acquisitions and preparing the deal pipeline for accelerated activity in 2019.
At the end of October (2018) we acquired a boutique hotel in Kyoto called Hotel Owan on behalf of our institutional Client, Shinhan Financial Group. The property has been renamed as Hotel Owan Hanami (https://resistay.jp/en/room/owan-amaterrace/) and is a popular choice for Asian and Western Families visiting Kyoto due to the offering of large rooms, a superb design concept combining Japanese and contemporary design motifs, and ease of access to major tourism destinations in Kyoto.
Hotel Owan
One of our investment assumptions for the Hotel Owan acquisition was that the ADR’s (Average Daily Room Rate) were undervalued and that we could raise the rates. We have already started to increase the ADR’s in our first two months of ownership and this is increasing the Net Operating Income of the asset.
Hotel Owan
Hotel Owan
Previously in August (2018) we acquired the first ryokan for the Japan Boutique Hospitality Fund, Shousenkaku Kagetsu (https://www.shousenkaku-kagetsu.com/en/). We are particularly keen on the ryokan sector of the Japanese hospitality market as we feel it is undervalued, fragmented and there is tremendous opportunity to apply a value-add investment approach to well selected ryokans.
Shousenkaku Kagetsu
In the case of Kagetsu, the historical occupancy levels were 53% on average. By enhancing the marketing strategy and taking a more proactive marketing approach, in just three months of ownership, we have already moved the needle on the occupancies from 53% to 68% in pre-ski season months. Now that we are in the ski season in Japan, we anticipate to be running at near 100% capacity through April 2019. We will be making physical enhancements to the property in May by renovating 10 of the 28 rooms in Kagetsu ryokan, further enhancing the value of the property.
Shousenkaku Kagetsu
Shousenkaku Kagetsu
Our investment team’s ability to identify undervalued hospitality assets where we can actively improve the property and operations is already bearing fruit in these first two acquisitions.
In addition to acquiring these two properties and beginning the value-creation process, the Japan CRE investment team has been busy building the pipeline of investable assets for 2019, with on-site due diligence visits throughout Japan, where we have identified attractive boutique hospitality assets at attractive prices.
As we kick off the New Year of 2019, we now have a pipeline of 52 potential assets that are under various stages of due diligence.
The first quarter of 2019 is going to be a busy time as we start to ramp up the acquisition process for the Japan Boutique Hospitality Fund and our institutional mandates. At a minimum we anticipate acquiring and closing on 3-4 assets by March 2019.
While we can not disclose all of these assets at this point in time, one of the acquisitions we are most excited about is Project Falcon which is our acquisition of 24 machiyas in Kyoto which will be transformed into an Urban Luxury Machiya Resort. We have been working on this project for 8 months and we are scheduled to close and become the majority equity owner of the project at the end of January 2019.
Mockup of Project Falcon
We will also be acquiring a larger boutique hotel in Tokyo for an institutional partner, and a number of ryokans for the Japan Boutique Hospitality Fund.
Ryokan Pipeline Asset
We will be announcing our first capital call and first soft closing on 10 January 2019 in order to facilitate the closing and acquisition of Project Falcon at the end of January.
We appreciate all those investors who have already made a commitment to the Fund and to those who will be joining us at the 10 January capital call.
We want to take this opportunity to wish all our Clients and Partners a wonderful 2019 filled with abundant success and good health.
Sincerely,
Christopher A. Aiello
Managing Director – Japan Real Estate
Odyssey Asset Management Limited
Odyssey Asset Management Ltd, a sister company to the Odyssey Capital Group, is a Hong Kong SFC 1, 4 & 9 licensed company. The Japanese CRE team is headed up by Christopher A. Aiello, and also includes Alex Walker, Daniel Vovil and Sam Luck.
Odyssey Capital Group Ltd is Asia’s leading independent Alternative Asset Manager that provides differentiated and bespoke investment solutions across multiple asset classes, including asset management, real estate, private equity and hedge funds. The Firm’s primary focus is to seek out undervalued investment opportunities to co-invest in with its clients.
The Odyssey team comprises over 30 experienced executives, asset managers, lawyers, private bankers, trust & tax planning specialists and experienced investors with over 400 years of combined financial and operational experience across the Asia Pacific, Europe and North America.
For more information about the Odyssey Japan Boutique Hospitality Fund, phone or email Daniel Vovil via the contact details listed below.
Odyssey Capital Group Ltd is pleased to announce that the Odyssey Japan Private Equity Real Estate division has been selected by Shinhan Investment Corp (a division of Shinhan Financial Group) to be their Japan Hospitality Advisor and Fund Manager for an institutional mandate.
The joint venture will allow Shinhan’s clients to benefit from Odyssey’s Japan Hospitality investment strategy, which includes seeking investments in boutique hotels, Ryokan’s (Traditional Japanese Inns) and Machiya’s (Traditional Japanese Townhouses) in the Kansai region and other areas of Japan. The investment model is to acquire, re-position and operate. By deploying a value-add strategy, Odyssey aims to increase the value of the assets acquired both at the asset level and the operational level. Odyssey’s goal is to increase the value of the underlying assets through a combination of property enhancements and improving the operational efficiencies of the underlying assets.
On the back of its strong and stable corporate governance and financial structure, Shinhan Investment Corp is fast emerging as a leader in Korea’s securities industry and provides securities trading, wealth management, and investment banking services, mergers and acquisitions, investment trusts, and corporate financing services. Shinhan Investment serves clients worldwide and is a subsidiary of Shinhan Financial Group, the second largest Bank in South Korea. Shinhan is, historically, the first bank in Korea, established in 1897 and now boasting more than 10,000 employees with more than US$260 billion in total assets.
Coinciding with the partnership between Odyssey and Shinhan is the initial acquisition of an attractive boutique hotel in Kyoto, Hotel Owan (https://resistay.jp/en/room/owan-amaterrace/) with the closing completed on the Friday 26th of October.
Kyoto is the historical capital of Japan and, as a result, many of Japan’s greatest entertainers, artists, chefs, designers and architects have resided and honed their craft in and around the city.
Odyssey’s boutique hotel asset embodies Japanese traditional culture and combines traditional, historical, Kyoto-based design and art motifs with modern and funky, boutique construction. Hotel Owan has 19 rooms which spread across 4 floors and comprise 8 wholly unique styles to cater to all types of affluent taste, whether they be for a room that includes tatami floor space, or one fitted with spacious, family-sized, double bunk beds or sleek and minimalist rooms for couples. With traditional Kyoto crafts, such as Nishijin fabric, and delicately featured interiors, you can feel an authentic beautiful Kyoto experience during your stay.
The appeal for local and foreign guests is well established as Hotel Owan has operated at an occupancy rate above 80% since it’s opening in 2017 and frequently experiences periods of 100% occupancy with consistent, ubiquitous, rave reviews on its quality of construction and design, it’s feel and styling and its central location and service.
Odyssey’s Japan Real Estate investment team, led by Christopher A. Aiello, was able to acquire the asset at a below market price and felt that current market demand will allow for increasing Average Daily Room Rates (ADR’s) by 20% to 25% over the next 12 months. Odyssey also plans to add concierge service upgrades and also employ a focused and upgraded digital marketing and direct bookings strategy.
The Managing Director of Odyssey Japan CRE, Christopher Aiello said, “We are excited to have completed the acquisition of this wonderful boutique hotel today. We have been able to secure this asset over other bidders due to the long term vision we have for the Japanese Boutique Hospitality industry, the strength of the Odyssey team and our seasoned relationships in Japan. We were able to secure a very attractive debt package for this acquisition from Mitsublishi UFG, one of the leading banks in Japan with an LTV ratio of 65%, non-recourse debt, and with an annual cost of 1.6% pa.”
Odyssey has long-term working relationships with the top leading individuals and firms in the Japanese commercial real estate and hospitality market and these partnerships include our panel banks, trust institutions, local asset managers, legal counsel, tax specialists and accountancy professionals.
The Odyssey CRE team commenced operations in early 2017 in Japan, and its well established and deep local presence, networks and insights allowed for the identification of the best and most appropriate real estate opportunities for the Odyssey Japan Hospitality strategy. Since this time, the Manager has reviewed more than 50 assets and has built up a robust pipeline.
The Odyssey Japan Real Estate investment team looks forward to providing our valued clients with more unique and exciting opportunities in what, we believe, will be one of the most successful Japanese hospitality investment projects to date. Please contact Odyssey, should you be interested in investing in Japanese real estate.
Odyssey Asset Management Limited
Odyssey Asset Management Ltd, a sister company to the Odyssey Capital Group, is a Hong Kong SFC 1, 4 & 9 licensed company. The Japanese CRE team is headed up by Christopher A. Aiello, and also includes Alex Walker, Daniel Vovil and Sam Luck.
Odyssey Capital Group Ltd is Asia’s leading independent Alternative Asset Manager that provides differentiated and bespoke investment solutions across multiple asset classes, including asset management, real estate, private equity and hedge funds. The Firm’s primary focus is to seek out undervalued investment opportunities to co-invest in with its clients.
The Odyssey team comprises over 30 experienced executives, asset managers, lawyers, private bankers, trust & tax planning specialists and experienced investors with over 400 years of combined financial and operational experience across the Asia Pacific, Europe and North America.
If you would like to learn more about Owan Hotel or if you would like to learn about our upcoming property purchases, please get in touch with us at: japan@odysseycapital-group.com
For more information about the Odyssey Japan Boutique Hospitality Fund, phone or email Daniel Vovil via the contact details listed below.
We are very pleased to announce that, as part of our Japanese Boutique Hotel strategy, we have made our first acquisition, a uniquely charmingRyokan (traditional Japanese inn) called “Kagetsu” in Echigo Yuzawa, Niigata Prefecture – see the website here: https://www.shousenkaku-kagetsu.com
(Kagetsu Ryokan Room with outside Bath)
(Kagetsu Ryokan In-house Onsen)
Kagetsu is surrounded by three exceptional ski resorts and bordered by Takizawa Park and a quaint river that flows from the nearby Fudotaki Falls. Kagetsu has been owned and operated by the same family for more than 30 years.
During the winter season, our guests have access to 3 different ski resorts where they are able to enjoy the renowned Japanese slopes or beautiful hot-springs.
(Fudotaki Falls in Echigo Yuzawa)
(Local Echigo Yuzawa Hot Springs)
But it’s also the Spring, Summer and Fall that attract tourists from all over, as these seasons are filled with hiking and mountain biking, golfing, fishing, delicious farm to table local cuisine, sake tasting at famous sake breweries. The area is well known for young couples to make pledges and prayers at the famous Fudotaki Falls.
(Yuzawa River)
(Yuzawa Chuo Park)
After completing thorough due diligence, the key parameters for the purchase of Kagetsu included: the abundant tourist experiences that guests can enjoy during all four seasons in the surrounding area and community, securing a below market acquisition price which will contribute to the a targeted IRR of 20.3%, an attractive cash-on-cash yield of 12% based on the application of our value-enhancement strategies along with favourable debt financing at 1.8% p.a., all combine as key factors behind the acquisition of this unique property as the first of many for Odyssey’s Japan Boutique Accommodation strategy.
(Kagetsu Ryokan Entrance)
(Kagetsu Ryokan Deluxe Room)
Clients of Odyssey are eligible for a 20% discount on room stays so please contact your Private Client Adviser if you are planning to be in Japan and would like to experience the charm of Kagetsu.
If you would like to learn more about Kagetsu or if you would like to learn about our upcoming property purchases, please get in touch with us at: japan@odysseycapital-group.com
(Kagetsu Ryokan Banquet Hall)
For more information about the Odyssey Japan Boutique Hospitality Fund, phone or email Daniel Vovil via the contact details listed below.
WILLIAMS MEDIA sat down with Christopher Aiello, Fund Manager of the Odyssey Japan Boutique Hospitality Fund about their latest alternative real estate strategy.
The Odyssey Japan Boutique Hospitality Fund, launched on 16 May, aims to preserve and transform historical buildings into luxury hotel destinations, in particular, heritage sites, including Machiyas and Ryokans (traditional Japanese inns and B&B properties over 100 years old).
The Fund is managed by Odyssey Capital Group Ltd, Asia’s leading independent Alternative Asset Manager, who provide differentiated and bespoke investment solutions across multiple assets classes.
Grand entrance to Ryokan Hotel lobby (Source: Daniel Vovil, Odyssey Capital Group)
The Fund’s goal is to preserve the historical value of local architecture, repurposing them into boutique luxury hospitality assets that embody the beauty and refinement of Japanese culture and design, while preserving traditional Japanese architecture and construction techniques.
By introducing the luxury hotel experience, the Odyssey Japan Boutique Hospitality Fund will provide guests with a high end and traditional Japanese accommodation experience delivered by a team of hospitality professionals.
The boutique accommodation market is currently suffering from a chronic undersupply of luxury accommodation, and with the Tokyo 2020 Olympics fast approaching, Japan’s boutique hospitality industry has never been more in demand. WILLIAMS MEDIA spoke with Christopher Aiello, the Fund manager of the Odyssey Japan Boutique Hospitality Fund who said, “With our unique positioning in this attractively placed sub-segment of the property market, experienced and local team, and our exclusive access to off-market undervalued assets, the Odyssey Japan Boutique Hospitality Fund presents an excellent opportunity for our investment partners to gain exposure to this asset class.”
Bridge leading to Ryokan entrance (Source: Daniel Vovil, Odyssey Capital Group)
“A boom in the tourism sector has seen significant growth in both macroeconomy and Japan’s hospitality sector. And since Prime Minister Abe’s appointment in 2012, inbound tourist arrivals have risen fourfold, the demand for accommodation has never been higher,” Aiello said.
Christopher furthered, “The fundamentals of the Japanese hospitality sector remain very favourable, characterised by high demand and insufficient supply. Historically, corporate investors in Japan have underinvested in building more hotels in the period from 2000-2012.
Due to fundamental changes like removing the visa restrictions for tourists from mainland China and ASEAN and the increase in low-cost air carriers making travel to Japan more affordable and accessible, the market was caught unprepared for the significant increase in demand for short-term accommodation.
Ryokan hotel room overlooking scenic mountains (Source: Daniel Vovil, Odyssey Capital Group)
With a focused strategy to Acquire, Renovate, Reposition and Operate, the Odyssey Japan Boutique Hospitality Fund is well placed to leverage this attractive asset class. The Fund has been developing a pipeline of assets over the past 6 months, some examples of these include:
Project “Kagetsu” a portfolio of Ryokan’s in the Niigata prefecture,
Project “Falcon” a +20 villa Machiya resort redevelopment site in Kyoto, and
Project “Mochi” a 1930s art deco boutique hotel in the Port District of Kyushu.
Aiello says, “The fund was only formally launched on 16 May and so far, we have received very strong interest from a range of Family Offices, HNW individuals and institutions. We are confident that we will achieve the funds first closing of USD$100 million by the end of August.”
Relaxing outdoor Hot Spring Onsen bath at Hotel project (Source: Daniel Vovil, Odyssey Capital Group)
For more information about Japan Boutique Hospitality Fund, phone or email Daniel Vovil via the contact details listed below.
The Flying Winemaker lands in New Zealand with the acquisition of Gladstone Vineyard by Odyssey Capital Group
11 May 2018
Leading Wairarapa wine producer Gladstone Vineyard is entering a new chapter as the business is set to be acquired by Odyssey Capital Group in partnership with Flying Winemaker Holdings Limited.
Odyssey Capital Group is Asia’s leading independent alternative asset manager that provides differentiated and bespoke investment solutions across multiple assets classes, one of which is attractive alcohol opportunities in the Asia-Pacific region. The Gladstone Vineyard purchase adds to the group’s stable of portfolio companies that the company offers via its sister business, Odyssey Asset Management Ltd, a SFC Type 1, 4 and 9 licensed company.
The Flying Winemaker is a multi-faceted Australasian wine producer founded by award winning winemaker Eddie McDougall.
Under the new ownership, which is subject to New Zealand Overseas Investment Office approval, there is opportunity for significant growth in production, a realignment of the brands under the Flying Winemaker’s established partner network and a priority focus on Asia-Pacific distribution.
Christine Kernohan, the current proprietor of Gladstone Vineyard, will stay on as General Manager/Chief Winemaker, along with key Gladstone staff, who will continue to provide significant input into running the vineyard, in conjunction with The Flying Winemaker.
Daniel Vovil says “Odyssey is pleased to be working with its long-term client, The Flying Winemaker and to have the opportunity to acquire such an attractive asset with a great team, that is Gladstone Vineyard. The acquisition of Gladstone Vineyard further adds to Odyssey’s vineyard and alcohol portfolio in the Asia-Pacific region and demonstrates our commitment to the industry and the region.”
Christine Kernohan says she is pleased negotiations with Odyssey and Eddie have reached this outcome.
“Having expanded our vineyards from an annual production of 1,000 cases to around 10,000 cases in the past 20 years, we are pleased that Odyssey and The Flying Winemaker see the huge potential of Gladstone Vineyard wines on the world stage.”
Eddie McDougall says he is looking forward to building on Gladstone Vineyard’s successes.
“It has been a long and detailed process when it came to selecting the right vineyard and region in New Zealand that I felt was going to offer wine drinkers the next big thing. It was important to me that we become custodians of an existing vineyard that showed great promise if it could utilise our winemaking expertise and branded ecosytem. I recognise world-class winemaking businesses are not built in a day and having the chance to take over Gladstone Vineyard with more than 30 years on the books makes this a very special opportunity. My team and I are incredibly excited to become the new custodians of the vineyard as we continue to build on the foundations laid by the Kernohan family and their team.”
The Flying Winemaker, regarded as Australasia’s leading voice in wine, was born on the streets of Hong Kong in 2010. The brand originated as a talisman for those determined to change the way wine is perceived, enjoyed and shared in Asia. Led by founder and winemaker Eddie McDougall, the company continues to drive a vino revolution in a region where wine still has a very white tablecloth perception.
With a longstanding commitment to making award-winning wines, running a comprehensive online store, hosting guerilla and educational wine tastings (Rosé Revolution), producing modern marketing and media content (Asian Wine Review), The Flying Winemaker leads the charge as the world’s most exciting wine brand.
The launch of a Television Series on Discovery Channel and Netflix brought The Flying Winemaker name into over 472 Million households across the globe. The result of this worldwide exposure has led to partnerships with some of the world’s most dynamic companies, such as Microsoft, Sky Team Alliance, MasterCard and Lan Kwai Fong Group.
The Flying Winemaker’s ongoing commitment to winemaking has now evolved to offer a fully comprehensive grape to glass service for new wineries in emerging wine regions. With a team of avid winemakers, experienced marketers and former luxury hospitality professionals, The Flying Winemaker crew is ready to bring anyone’s dream to make and sell great wines to life.
Eddie McDougall is the award-winning winemaker, chairman of the Asian Wine Review, wine critic, columnist and TV personality behind The Flying Winemaker, one of Asia-Pacific’s most dynamic wine brands.
With over 15 years of winemaking experience, Eddie has worked with some of the most influential wineries in the New and Old World including the likes of Vietti, Mas de Daumas Gassac, Giant Steps, Deep Woods Estate and Silver Heights. In 2007, the young winemaker took his first step as a young entrepreneur, creating his Australian wine brand, Eddie McDougall Wines. Eddie’s wine brand has been awarded a 4.5 star rating from James Halliday whilst his collection of wines continue to score 90+ points from international critics.
About Gladstone Vineyard
Gladstone Vineyard is a family business with an international reputation for distinctive, high quality wines of finesse and complexity. Established in 1986, Gladstone Vineyard was the first of a cluster of boutique wineries to emerge on the old riverbed of the Ruamahanga River, in New Zealand’s Wairarapa wine region. Today, the winery produces around 120,000 bottles of wine annually, concentrating on its award winning Pinot Noir, Sauvignon Blanc and Pinot Gris.
Gladstone Vineyard currently exports around50 percent of its production, with markets including Australia, the United Kingdom, Norway, the United States, Canada, Japan, Singapore, and the Philippines.
About Odyssey Capital Group
Odyssey Capital Group is Asia’s leading independent Alternative Asset Manager that provides differentiated and bespoke investment solutions across multiple assets classes to its clients. The company’s divisions include: Asset Management, Wealth Management, Hedge Funds and Real Estate.
The Firm’s primary focus is to seek out undervalued investment opportunities to co-invest with its clients.
The Odyssey team comprises 28 experienced executives, asset managers, lawyers, private bankers, trust & tax planning specialists and experienced investors with over 400 years of combined financial and operational experience across Asia Pacific, Europe and North America.
This experience allows the Odyssey team to provide a broad regional industry expertise, insight into global macro and geopolitical trends, and a powerful network of global relationships.
When clients partner with the Odyssey Group of companies, they benefit from the breadth and depth of expertise with the entire firm working in unison to achieve a targeted outcome.
Our innovative approach allows us to generate attractive investment returns within the context of a prudent and long term horizon.
We aim to only employ the highest quality people as partners in our business, while pursuing the highest standards, and aligning our interests with those of our investment partners. It is our goal to be the “trusted partner” for our clients’ needs.
Hotel Owan
Hotel Owan
Hotel Owan
Shousenkaku Kagetsu
Shousenkaku Kagetsu
Shousenkaku Kagetsu
Pipeline asset locations: Tokyo, Kyoto, Osaka, Izu, Niigata, Kitakyushu & Kobe
Mockup of Project Falcon
Ryokan Pipeline Asset
(Kagetsu Ryokan Room with outside Bath)
(Kagetsu Ryokan In-house Onsen)
(Fudotaki Falls in Echigo Yuzawa) 
(Local Echigo Yuzawa Hot Springs)
(Yuzawa River) 
(Yuzawa Chuo Park)
(Kagetsu Ryokan Entrance)
(Kagetsu Ryokan Deluxe Room)
(Kagetsu Ryokan Banquet Hall)![[Press Release] Fund to convert Japan’s historic architecture into luxury boutique hotels](https://odyssey-grp.com/wp-content/uploads/2018/06/ryokan_5_resized.jpg)
Relaxing outdoor Hot Spring Onsen bath at Hotel project (Source: Daniel Vovil, Odyssey Capital Group)