Singapore's Frasers ties up with Britain's Yotel in first development project in Japan
Singapore's Frasers ties up with Britain's Yotel in first development project in Japan
– Singapore's Frasers Hospitality and Britain-based lifestyle hotel chain Yotel on June 9 celebrated several firsts with the official opening of the 244-room Yotel Tokyo Ginza.
It marks the first time the two brands have teamed up, Yotel's debut in the Japanese market and Frasers Hospitality's maiden ground-up investment and development project in the country. The Singapore company acquired the land and oversaw the building's construction before handing the operations over to another company.
Situated on the periphery of Ginza, the Japanese capital's most prestigious shopping district, the 14-storey boutique hotel offers compact 'cabins' of between 14 sq m and 18 sq m in size, as well as family units comprising two connecting rooms.
The hotel is strategically positioned near the Shimbashi district, a haven for salarymen, and the Shiodome business district, which caters to business and leisure travellers alike.
This marks a rare ground-up project for Frasers Hospitality, as most of its real estate investments thus far have been the acquisition of existing assets.
The company is riding the crest of a boom in both real estate investment and inbound tourism in Japan, which has been a draw for many Singaporean hospitality and real estate firms. Recent and upcoming entrants include Pan Pacific Hotels Group, SC Global, Banyan Group and Capella Hotels & Resorts.
This comes as Frasers Hospitality has embarked on what it describes as 'twin engines of growth'. It operates hotels and serviced apartments across seven brands – including Fraser Residence, Capri and Modena – that may be owned by a third-party company.
It is also acquiring real estate – plots of undeveloped land as well as ready-built property – that can be operated by another owner. Yotel Tokyo Ginza was one such property constructed on undeveloped land.
Mr Jason Leong, Frasers Hospitality's executive director and head of investment and asset management, told The Straits Times that he takes a 'brand-agnostic' approach in assessing potential investments.
'Unlike in the past, when we tend to build a Frasers property on any plot of land that we buy, the priority now is to focus on the best use for a plot of land,' he said. 'We are very returns-driven, and it is about finding the best business model that suits the asset.'
In Japan, Frasers Hospitality owns the ANA Crowne Plaza Hotel in Kobe – which was bought in 2014 through a real estate investment trust – as well as a 124-unit premium rental apartment in Osaka, which was acquired in 2023 under a joint venture with Hong Kong-based Alyssa Partners.
It separately manages – without owning the real estate – the 114-key Fraser Residence Nankai Osaka, which was built in 2010, and the 170-unit Fraser Place Roppongi Tokyo, which is set to open in early 2026.
The collaboration with Yotel was driven by the site's characteristics and market demands, Mr Leong said, adding that percentage returns were in the 'high single digits'. He declined to reveal how much the company invested.
He added that Yotel's brand concept of a lifestyle micro-hotel allows them to maximise the number of rooms in a prime real estate location, catering to guests seeking shorter stays. Space constraints made it difficult for Frasers to adapt the site for its brands, which have larger rooms and are more focused on medium- to long-term stays.
Yotel Tokyo Ginza was completed four months ahead of schedule and has been open to guests since December 2024 , half a year before its June official opening .
A guest room at Yotel Tokyo Ginza.
ST PHOTO: WALTER SIM
Occupancy has been above 70 per cent, with room rates starting at about 22,000 yen (S$195) a night, including taxes. Rates have, however, soared above 40,000 yen a night during peak travel periods , such as during the height of the cherry blossom season in March and April.
This makes Yotel more expensive than other ubiquitous no-frills Japanese business hotel chains, such as APA Hotels. For instance, rates for an 11 sq m room at the nearby APA Hotel Shimbashi-Toranomon range from around 7,000 yen a night in July to 30,200 yen a night in November, based on checks by ST .
Yotel markets itself as being ideal for the 'modern urban explorer', with plenty of fun elements. Its reception is dubbed 'Mission Control', while the vibrant social space 'Komyuniti' triples up as a restaurant, lounge and bar with daily happy hour specials.
Robots deliver items such as extra towels and bottled water to guest rooms, which are equipped with smart TVs and mechanised beds with adjustable reclining angles.
Guests should not expect a very Japanese experience . Rooms are not equipped with amenities that are common in Japanese hotels, such as bathtubs and yukata robes or pyjamas. Toiletries like shampoo and body wash are from Australian beauty brand Urban Jungle, which uses South Korean ingredients.
Also, unlike Japanese business hotels which may feel cramped, Yotel's rooms are designed such that guests should not feel claustrophobic, having decent space to store big luggage or roll out a yoga mat to stretch .
Given its location, travellers can pop out for late-night ramen in Shimbashi or a nightcap at one of Ginza's many cosy bars. Don Quijote discount chain is around the corner, and those who are young at heart will enjoy shopping at the nearby Hakuhinkan Toy Park.
Frasers Hospitality's approach to buying real estate is 'not 100 per cent leisure', said Mr Leong, who added that it looks for 'a good mix of corporate and leisure potential'.
If the site were located elsewhere in Tokyo, farther away from the business centre, the company might have walked away, he said.
'Do we believe in the Japan story? Yes, we do,' he said. 'But I'm not going to go all-Japan, I'm not going to Niseko (in Hokkaido), that's not my space.'
As for moving into fast-growing second-tier cities such as Fukuoka, Nagoya or Sapporo, Mr Leong said: 'We don't want to spread ourselves too thin. The preference is to have a few more assets concentrated in gateway cities rather than having one asset in each city.'
Walter Sim is Japan correspondent at The Straits Times. Based in Tokyo, he writes about political, economic and socio-cultural issues.
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