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Myoko Kogen - Suginohara News
Posted on June 27, 2024
Singapore fund buys ski resorts in Niigata, raises hopes, concerns
By MASAKI KASAI/ Staff Writer
February 19, 2024 at 07:00 JST
Mount Madaraoyama, foreground center, and Lake Nojiriko are seen on Dec. 30, 2023, from the Myoko Suginohara ski resort in Myoko, Niigata Prefecture, which was recently acquired by Patience Capital Group Pte Ltd. (Masaki Kasai)
MYOKO, Niigata Prefecture--This mountain city is known as the training site for Aoyama Gakuin University, a powerhouse in the annual New Year’s Hakone Ekiden long-distance relay road race.
But in Myoko’s Suginosawa district, which faces the border with Nagano Prefecture, mixed feelings about the future are running through the minds of residents.
The city has been seeing its population age and decline. And around autumn 2022, rumors spread that large land plots in the Suginosawa district were being bought up.
Shigeo Yamakawa, the 51-year-old head of the Suginosawa Tourist Office, said he remembers how people speculated about whether certain homes or land plots had been sold.
There was truth to the rumors.
In spring 2022, Myoko city sold 43 hectares of land, including part of the Myoko-Togakushi Renzan National Park, to a company affiliated with Patience Capital Group Pte Ltd., a real estate investment fund based in Singapore and Tokyo.
PCG then acquired the Madarao Mountain Resort, a ski area straddling the cities of Myoko and Iiyama, Nagano Prefecture.
Last November, it was learned that PCG had bought the Myoko Suginohara ski resort in the Suginosawa district from Seibu Holdings Inc.
Yamakawa said he has both hopes and concerns about PCG’s acquisitions and what it plans to do.
“I would love to see more visitors from abroad and more tourists here, but I am also concerned our local community could be left behind if the focus is on attracting wealthy people,” he said.
About 30 accommodation facilities are currently members of the Suginosawa Tourist Office, down from about 100 in the 1990s.
The population is aging and shrinking, and many tourism-related businesses are suffering from a lack of successors.
Ken Chan, the 56-year-old founder and CEO of PCG, provided a glimpse of his development plan in an online interview in Singapore last December.
Chan lived in Japan until he was 6. Fluent in Japanese, he previously headed the Japan branch of GIC Pte Ltd., Singapore’s sovereign investment fund.
“I hope to develop a world-class high-end ski resort that will be the only presence of its kind,” he said.
Chan began buying land plots for his plan in 2020 and has now purchased between 300 and 350 hectares, mostly in the Myoko Kogen, Madarao and Lake Nojiriko areas.
He said he plans to build a resort hotel in Myoko Kogen by the end of 2027, along with a downtown area lined with luxury brand outlets and restaurants.
Chan has already procured about 35 billion yen ($240 million) for that purpose through a real estate fund. He said he intends to raise more funds, with his long-term investment expected to be worth more than 200 billion yen.
He said his ideal ski resort is Canada’s Whistler, the largest in North America.
“It provides clues on how to lure customers, not just in winter but also in summer,” Chan said. “The Myoko and Madarao areas offer convenient access being located about a two-and-a-half hours’ ride on Shinkansen and car from Tokyo. I am hoping to create an all-season mountain resort there.”
PCG is not the only foreign capital company investing in Japanese ski resorts.
GIC, Chan’s former employer, has acquired five ski resorts in Japan, including the Naeba resort in Niigata Prefecture, from Seibu Holdings.
“The ski industry continues to grow in Western countries, contrary to what’s happening in Japan,” Chan said. “There is potential for development in Japan as well.”
He was asked about public sentiment in Myoko.
“I know there are concerns about land plots in Japan being bought by foreign capital,” Chan said. “Let’s note, however, that we have no way to take those land plots back to Singapore. I just hope what we are doing will help revitalize communities, even though I won’t say we will be taking the lead in doing so.”
The Myoko Suginohara ski resort, which boasts a maximum trail length of 8.5 kilometers, opened in 1964.
The resort was previously packed with skiers, and it provided winter work for farmers.
Hisataka Yamakawa, an 84-year-old who has long operated a variety shop in the Suginosawa district and seen the changes in the community, said he also has mixed feelings about the development.
“I just don’t know if it is safe to place rosy hopes again on what we would call a second fleet of ‘Black Ships,’” he said, referring to U.S. Commodore Matthew Perry’s fleet that pressured Japan to open to the rest of the world in the mid-19th century.
Investment update for Myoko Kogen
Posted on June 27, 2024
Exciting time ahead for the Myoko Kogen and surrounding areas.
About 240 kilometers northwest of Tokyo, in a slivered valley that leads to the Sea of Japan, lies a sleepy pocket of the nation’s ski country called Myoko Kogen. Bustling in the 1980s bubble era with young skiers and neon-lit streets, the area has now seen better days.
But in the coming years, Ken Chan, the former Japan head of Singapore sovereign wealth fund GIC, aims to invest $1.4 billion transforming it into a luxury skiing paradise to rival Aspen, Whistler and St. Moritz. For two years his investment firm has bought surrounding land at cut-rate prices thanks to the plunging yen. And by 2026 he aims to have international hotels in place, alongside housing for thousands of workers.
The plan to put Myoko on the world tourism map is a cornerstone project for Chan and his company Patience Capital Group, which manages $500 million and also invests in residential real estate assets in Japan. It comes as more global investors look to get in on the country’s red-hot tourism rebound, and its ski slopes become more celebrated.
"I always say that we can’t put this project into a bag and take it back to Singapore — this is permanent,” Chan, 56, said in an interview at his Tokyo office. "We’re ready to do this in a very proper way and launch it big time.”
Chan has just taken the first step on what he hopes to pin his legacy. His firm has raised ¥35 billion ($235 million) from institutions in Japan and Singapore for its Japan Tourism Fund 1, with much of that tagged for the ski initiative. Investors include Mizuho Bank, Temasek Holdings’s Pavilion Capital and a Singapore university endowment, Patience said in a statement on Wednesday.
By December, he expects to announce at least two or three winners of a hotel tender process that has attracted more than 10 bids from global giants.
Eventually, over at least three phases, Chan anticipates it will take about 10 years and around ¥210 billion for his vision to reach fruition — with the mountains in the Myoko area filled with flagship boutiques and world-class dining. Chan envisages travelers taking a four-hour chauffeured drive or a roughly two-hour bullet train from Tokyo before entering the luxury bubble, where they’ll either ski in and out of resorts in winter, and spend the warmer months hiking or sending their children to summer camps.
There are risks for a project in its infancy. Funding is one — just the first phase will need almost half a billion dollars in investments over the next three to four years alone, according to Chan’s estimates.
The number of skiers and snowboarders in Japan has also been declining — down about 75% in 2020 from its peak in the late 1990s, according to the Japan Productivity Center. That means Chan will need to rely on foreign tourists. It remains unclear how locals will take the influx of rich travelers and the workforce needed to service them.
Chan is confident that he can work with residents and that people will come to Myoko, already known among buffs for its powdery snow and one of the nation’s longest ski runs. His ties to Japan run deep — he was born in the island nation, the son of a Singaporean doctor who lived in the country until Chan was 6. After graduating from the University of Southern California, Chan returned to Japan and then Singapore to work in information technology and finance roles.
Chan joined GIC at the turn of the century, when the wealth fund was repeatedly losing bids for Japanese real estate and wanted a Singaporean with the cultural skills and experience to work in Tokyo. In 2004, he was transferred to Japan as its representative in the country, where he built relationships with top executives such as Shinichi Sasaki, the former deputy president of trading giant Sumitomo.
"Ken’s been smart about bringing on investors to this project,” said Sasaki, who met Chan in 2011 and is now an adviser at Patience. "He’s got a mix of overseas institutional and retail investors, as well as large and local Japanese banks. It’s a good balance.”
After almost 20 years, Chan left GIC in 2019 to strike out on his own. His firm also oversees the Japan Residential Opportunities Fund, with ¥40 billion in assets under management. It’s now in the market to raise ¥25 billion for a second residential fund, targeting annualized returns of 15%.
But it’s clear that he has a special passion for the ski project, as he runs through charts and maps, pointing out properties in negotiations and where he plans to install housing for workers. His firm already owns 350 hectares of land and parts of two mountains straddling Niigata and Nagano prefectures, including Madarao Mountain Resort, he said.
Yosuke Kanehira, who runs the Good Mountains restaurant a 30-minute drive away in the nearby town of Iiyama, reckons overseas tourists would reinvigorate resorts like Madarao.
"Madarao has mainly been full of cheap tours with low profit margins,” Kanehira said. "If a foreign fund buys the area and brings in foreign visitors, I’d look forward to that,” he said, while acknowledging that some older residents may dislike it.
In Nagano Prefecture, the government welcomes new ski resorts as long as they gain the understanding of residents, said Norihiko Wakabayashi, head of the prefecture’s Tourism Promotion Group.
"It’s clear that the number of visitors to ski resorts is decreasing year by year,” Wakabayashi said. "On the other hand, inbound visitors are expected to increase even more. So I’m glad to see revitalization of the ski industry.”
Like many rural areas in Japan, the city of Myoko has seen its population drastically shrink over the past 30 years.
While Niseko — Japan’s best-known ski hub — took about 19 years to reach its current state without a singular driver, Chan is planning the development from scratch, and believes owning the land will streamline the process.
"The company I’ve set up is going to go beyond me,” he said. "This is going to benefit the next generation.”
