Kabaya Golf Club in Ibaraki (File photo, courtesy of Tokyo Leisure Development)
South Korean investors are eyeing Japan’s golf resorts for sale amid the weak yen, rising demand for golf courses in the country and relatively low prices for the assets compared with Korean ones.
There are around 20 Japanese golf resorts on the Korean private equity market, according to industry insiders on Thursday. Given that around 30 golf courses are transacted in Japan a year, it means that most assets on the market are open to Korean buyers.
Tokyo Leisure Development Co. is set to send an investment teaser to Korea’s potential buyers of its three golf courses, with financial advisors KPMG Japan and Seoul-based Samjong KPMG, banking sources said on June 13.
The properties for sale are the 27-hole Kabaya Golf Club in Ibaraki Prefecture, about 140 kilometers (87 miles) northeast of Tokyo, the 18-hole Ise-Nakagawa Country Club in Mie Prefecture and the 18-hole Kinan Country Club in Prefecture, respectively taking around an hour by a car from Chubu Centair International Airport, Nagoya and Kansai International Airport.
“After the nummber of golf courses in Japan increased to around 2,000 during the economic bubble, the prices have plunged. The properties revive with more foreign visitors today, and Korean investors are looking for golf courses at attractive valuation,” a real estate industry source said.
Mona Yongpyong’s resort condominium Lusongce in Gangwon Province, Korea (Courtesy of Mona Yongpyog)
SYNERGY BETWEEN LEISURE AND GOLF
Korean strategic investors are seeking synergy between their existing golf and leisure business and Japanese golf courses.
Korea’s leading lesire building operator Mona Yongpyong, formerly Yongpyong Resort, acquired Japan’s Aino Resort Development which owns Aino Country Club and Shimabara Country Club in Nagasaki Prefecture in January this year.
Mona Yongpyong aims to boost the value of its golf course and resort condominium memberships by expanding in Japan.
Korean golf course operator Show Golf bought Satsuma Golf Resort, located in Kagoshima Prefecture in Japan, last December and plans to purchase four more Japanese courses and go public by the end of 2025.
Seoul-based real estate developer Cykan Holdings acquired Tenzan Country Club and Within Style Golf Club in Saga Prefecture last year to create synergy with its existing asset Takeo Ureshino Country Club in the same region.
Shimabara Country Club in Nagasaki (Courtesy of Mona Yongpyong)
GROWING DEMAND, BETTER PRICES
Korean investors expect that there will be a growing demand for Japanese golf courses.
More Korean golf tourists are choosing Japanese resorts rather than domestic ones due to lower green fees despite the flight costs. The average green fees in Korea range between 200,000 won ($145. 6) and 300,000 won, double to triple the expenses in Japan.
Meanwhile, the number of golf course customers in Jeju, Korea’s biggest island with around 30 golf courses, fell 12.3% on-year to 406,728 for the first quarter of this year.
Korean investors also see deals in Japan, given the asset prices and the low yen, are more attractive than in Korea.
Golf course transactions in Korea have been slow as the prices started to soar during the pandemic. Over the past three years, Korean golf courses were sold for 6.6 billion won per hole, more than seven times the Japanese ones.
By Byeong-Hwa Ryu
hwahwa@hankyung.com
Jihyun Kim edited this article.
