PAG Said in Talks to Buy Japanese Theme Park

A proposed casino could be livening up Nagasaki’s Huis Ten Bosch

Japan’s overstretched travel industry could be providing an investment opportunity for yet another international private equity firm, as PAG is reported to be in talks for a JPY 90 billion ($ 655 million) acquisition.

The Hong Kong-based fund manager is tipped to acquire Huis Ten Bosch, a mock-Dutch theme park in the Nagasaki Prefecture city of Sasebo from HIS, a Japanese travel agency which lost JPY 26.9 billion in the six months ending 30 April, as destinations in Asia’s second-largest economy have struggled with the lingering impact of the COVID-19 pandemic.

PAG, which is said to be aiming for more than 90 percent ownership in what is, at 152 hectares (376 acres), Japan’s largest theme park, would be acquiring a 66.7 percent stake in Huis Ten Bosch from HIS. The company would be acquiring the remaining target shares from local state-linked firms including Kyushu Electric Power, utility Saibu Gas and railway operator JR Kyushu, according to a report in Japan’s Nikkei.

With PAG having added $ 20 million to its opportunistic real estate strategies recently thanks to commitments from the Teacher Retirement System of Texas, the firm has cash on hand for acquisitions, with US-based Blackstone and Singapore’s GIC also having made major investments in Japan’s down- trodden hospitality assets as local firms seek to raise cash to cover losses incurred during the pandemic.

Casino Proposed

Built around a replica of the Huis Ten Bosch palace in the Hague, which serves as one of the three official residences of the Dutch monarch, the Nagasaki theme park was first opened in 1992 and had been acquired by Nomura Principal finance in 2003 after the project entered bankruptcy. HIS bought the park from Nomura in 2010.

Shan Weijian P.

PAG boss Shan Weijian

HIS had said last month that it was in talks with several potential buyers of the property, which has been proposed as a casino site. Plans for an integrated resort at Huis Ten Bosch would allow for four hotels with a total of 2,500 rooms which would feed punters into 3,000 electronic gambling machines and 400 gaming tables, according to an account in the Japan Times.

While no permits have been issued for the project at this time, officials in Nagasaki have predicted that the casino could attract 6.73 million customers annually and generate JPY 271.6 billion in yearly revenue starting from April 2031. Currently under review by Japan’s central government with a decision potentially on the way this year, the project would be operated by Casinos Austria International Japan.

HIS ‘half-year loss for the period through 30 April came after the travel agency had suffered a record shortfall of JPY 53 billion for the year ended 31 October 2021. With 80 percent of its revenue coming from overseas travel-related services, the company in September last year had sold its head office in Tokyo for JPY 21.5 billion.

Tourism Festival

The news of PAG’s potential deal comes around a half-year after Singapore’s GIC had made its own bet on the potential of Japanese tourism assets by acquiring 15 Prince hotels and 16 additional leisure properties from Seibu Holdings for $ 1.3 billion.

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Manhattan-based Blackstone had completed a similar acquisition in March 2021 when it acquired eight Japanese hotels from cash-strapped rail operator Kintetsu Group Holdings for a reported $ 550 million.

With investors fretting over rising interest rates in many of the world’s largest markets, expectations that Japan will keep borrowing costs at minimal levels in the coming months and years is helping to sharpen investor focus on one of Asia’s largest property sectors.

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