Odyssey Capital Group has launched a second Japan hospitality fund following a series of "attractive" investments within the country.

Odyssey Group Head of Real Estate Dan Vovil said the asset manager intended to invest in undervalued Japanese hospitality real estate assets through the newly created Odyssey Japan Hospitality Fund II.

"The Fund’s primary strategy is to acquire, renovate & reposition, operate and own Japanese hospitality assets that provide our guests with compelling hospitality experiences," he said.

"The fund will target the acquisition of three primary asset types: Historical and heritage buildings that can be converted into luxury boutique hotels, ryokans and machiyas in prime tourism locations throughout Japan.

Shosenkaku Kagetsu – Echigo Yuzawa, Niigata. Source: Odyssey Capital Group 

"The manager will be focused on acquisitions in the mid-tier space, which are defined as transactions in the range of US$5 Million to US$ 50 Million dollars where there is less competition from large Japanese REITS and global PE/RE funds, providing the Fund and our investors with better valuations and yields at the time of acquisition."

Mr Vovil said the fund was established in the wake of a series of investments made across the last 18 months, which it expected to generate "targeted investment returns of 8 per cent yield and 15 per cent net IRR for existing investors".

"The fund is a unique opportunity to capitalize upon the growth of the Japanese real estate market with a niche focus in boutique hospitality assets," he said.

Shosenkaku Kagetsu – Echigo Yuzawa, Niigata. Source: Odyssey Capital Group

"Japan’s rich cultural heritage and elegant and classic design provide the perfect backdrop to create modern luxury hospitality assets which are aesthetically pleasing and provide memorable hospitality experiences.

"We have received strong interest in the fund strategy and are looking forward to purchasing the first assets from the pipeline that we have developed over the past 6 months."

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