Japan construction and real estate market - Sekisui House trying housing-to-hotel shift

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Serviced apartments arrive in Otemachi too

Sekisui House [1928] has decided to develop long-term-stay serviced apartments targeting chiefly wealthy people from overseas in Akasaka 5-chome, with completion scheduled for 2020. The property is to have 223 guest rooms and will apparently involve a total investment of about ¥25bn including the cost of the land. Sekisui House is to handle the development and own the property, which is to be managed by Frasers Hospitality Pte Ltd, a member of the Singapore-headquartered Frasers Centerpoint Limited Group. In our view, the property could in the future be sold to an affiliated REIT. Sekisui House in June 2010 completed the Honmachi Garden City property in Osaka, which houses the St. Regis Osaka Hotel on its high-rise floors, and recently completed the redevelopment of the Hotel Fujita Kyoto acquired in 2006 from Fujita Kanko [9722], which opened a few years as the Ritz-Carlton Kyoto. We see an increasing possibility of the company expanding operations in the hotel field—something to watch for the future.