Acquiring second boutique hotel in Kyoto

Pegasus Capital has just acquired their second hotel located in Kyoto, Japan.

With the onslaught COVID-19, we have been actively looking for distressed opportunities in Japan. This hotel was put on sale by a regional cash strapped developer.

We managed to purchase the hotel at over a 20% discount to the asset’s replacement cost, over a 30% discount to the asset’s appraisal value and double digits normalized cash flow yields thus providing us with a huge margin of safety.

Located in Kyoto’s Shimogyo ward near the popular Shijo area, we believe that this acquisition checks the box for:

• The right location
• The right price
• An ample margin of safety

We will appoint a new tech-enabled hotel operator, Wayfarer 株式会社 (https://www.wayfarer-hotels.com) to operate, stabilize and turnaround the hotel.

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