Summit Ascent to develop luxury hotel in Okinawa, Japan after abandoning plans to expand Russian casino

The company revealed in an overnight filing that it will acquire the entire interest in the land, currently 51%-owned by LET Group Holdings and 49% by a private investor, for a total consideration of HK$280 million (US$36 million), pending relevant shareholder votes.

The land in question covers 108,799 square meters of undeveloped land in Nishihara, Okinawa prefecture, with Summit Ascent revealing it plans to develop the land into a “luxury hotel with seaside cabins”. The hotel, it explained, would provide a “strong potential synergy” with Japan’s plans to develop its first integrated resorts and related cross-selling opportunities. Japan’s central government recently approved a US$10 billion IR with a casino to be developed by MGM Resorts in Osaka.

“Other related industries can also reap the benefits of casino tourism, such as the hospitality industry,” Summit Ascent said. “There is strong potential synergy with Japan’s plans and cross selling opportunities for its integrated resort business.”

The land in question was first purchased by LET Group, then known as Suncity Group, in 2019 for a similar hotel development as part of the company’s efforts to pursue an IR license in Wakayama.

Suncity also purchased land in Hokkaido with intentions to develop a ski resort but announced the sale of that land only last month. Suncity withdrew from Japan’s IR race in 2021.

The decision by Summit Ascent to pursue a hotel development of its own in Okinawa comes after it raised HK$601.4 million (US$77 million) via a rights issue and placing in 2020, some of which was to have been used for a Phase II expansion of Tigre de Cristal. However, those plans were put on hold last year due to the ongoing conflict in Ukraine, with the company stating it “does not have a positive outlook for Tigre de Cristal and is of the opinion that developing Phase II would result in significantly increased expenditures with minimal potential return on investment in the current economic environment.”

Instead, it confirmed that it has now set aside HK$280 million to acquire the Okinawa land parcel and another HK$25 million for design and planning. No timeline has been laid out for construction of the hotel.

However, Summit Ascent, which also holds a stake in a US$1 billion hotel and casino development in Manila, said it “intends to expand its reach in Asia to diversify its geographical presence and mitigate some of the risks related to principally relying on Tigre de Cristal.”