Deep-dive 2021-4: Ichigo Hotel REIT Investment Corporation

Ichigo Hotel REIT Investment Corporation (3463 JP) is a Japanese hospitality REIT run by American hedge fund manager Scott Callon. It invests in lodging-focused hotels in major cities across Japan with a major focus on tourism.

The REIT was formed by sponsor Ichigo Inc, an asset management company run by Callon after he took over the company in 2008. Ichigo now manages three REITs: Ichigo Office, Ichigo Hotel and Ichigo Green. Ichigo's business model is to acquire assets at a discount using low-cost debt and then improve the assets over a period of 2-3 years. Callon has a reputation for treating minority shareholders well. Ichigo Hotel REIT is unusual among Japanese hospitality REITs in that it does not engage in empire building. The share count has been stable over the past few years and Scott Callon has said that he is not willing to issue new shares below book.

The assets themselves are of decent quality. They are well managed budget hotels relying on online travel agents for room di…