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Case Study

ANA Hotel Portfolio: Advisory and Divestment

With a relationship that has spanned close to a decade, Jones Lang LaSalle Hotels’ (”Firm”) first involvement with All Nippon Airways (“ANA”) was when our Firm acted as its exclusive advisor in the disposition of the ANA Grand Hotel Wien in Austria.

In the following years, ANA commenced on a review to determine if hotels were a core business for the airline. Realising there was potential for further asset enhancement within their hotel portfolio, ANA made a strategic decision to form a joint venture with an international management company to manage the 33 hotels it owned, leased and operated in Japan and internationally. Critical to the success of this joint venture was finding a partner who would not only continue to provide career opportunities for the staff but also deliver international best practice, operational expertise and marketing to all the hotels.

As exclusive advisor, Jones Lang LaSalle Hotels approached a selected list of potential partners through a competitive process. Following detailed negotiations, ANA announced in October 2006 the signing of a multi-brand hotel management joint venture with InterContinental Hotels Group and the formation of IHG ANA Hotels Group Japan (“IHG-ANA”), the largest international hotel management company in Japan.

When ANA decided to focus on its core airline business and sell its 13 owned and leased hotels in Japan (“Portfolio”) including ANA-InterContinental Hotel Tokyo and Manza Beach Hotel in Okinawa, they again turned to our Firm. The 5,000-room Portfolio was offered for sale to a pre-selected group of investors across the globe with the benefit of long term operating agreements with IHG-ANA. Historically the hotel investment market in Asia has been driven by owner operators but this is changing and investors are now acquiring hotels which are encumbered by operating agreements. The Portfolio presented a tremendous opportunity for an owner to work with the new operating joint venture to reposition and refurbish the hotels and to benefit from an ever strengthening domestic consumer market in Japan.

Through a highly competitive process, bids were received from both international and domestic Japanese investors reflecting the scarcity of opportunities to buy a portfolio of this size in a market with extremely high entry barriers to entry. In April 2007, the Portfolio was sold for JPY281.3 billion (approximately USD2.36 billion) to Morgan Stanley Real Estate Fund resulting in the largest hotel transaction in Asia Pacific and one of the biggest real estate sales the region has experienced. The sale was the culmination of six year’s work with ANA.

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