MHS Capital Partners said on Wednesday that its
fund, backed by a handful of wealthy individuals and European financial
institutions, had spent about US$2 million (S$3.3 million) on a 20-room
hotel catering to couples seeking privacy.
The purchase is the clearest sign yet that foreign
capital, which has already burnished the seedy reputation of the pachinko
pinball sector with its presence, is latching on to another profitable,
black sheep industry.
Japan's 17,000 love inns, which require minimal
staffing and boast rooms that can be hired for up to six times a day, have
been lauded by investors for their money-spinning potential.
Well-known international investment banks, hedge
funds and at least one Japanese institution are known to be looking at deals
in the sector, but MHS is the first group to speak openly about its
activities.
MHS head Miro Mijatovic described the fund's
acquisition - a family-run hotel in a Tokyo suburb - as a 'distressed asset'
that would be renovated and re-opened next year. 'We saw long-term
potential,' he said. -- FINANCIAL TIMES
Published
12 Nov 2004
