Japanese pachinko hall operator Okura Holdings has cited the need to diversify its interests after purchasing office, storage and parking space in Nagasaki for the purpose of generating rental revenue.
Okura, which operates 17 pachinko halls in the Kyushu, Kanto, Kansai and Chugoku regions, has been vocal in recent times regarding the challenges faced by the pachinko industry, including regulations introduced early last year that “limit the gaming element of pachinko and pachislot machines, reducing their attractiveness and negatively impacting customer traffic.”
Those challenges saw Okura purchase two equestrian horses and commence operation of a horse training facility in June 2019. Now the company has invested in property via 130 square meters of office space, almost 10,000 square meters of parking space and around 1,000 square meters of storage space in a nine-story office building in Nagasaki.
The total consideration for the acquisitions is JPY 782.2 million (US$7.6 million).
Outlining the reasons for its acquisition, Okura said, “The Group has been actively exploring opportunities to enhance and diversify its revenue stream. The Directors … consider that the acquisition provides an excellent opportunity for the Group to (i) expand its property investment portfolio, which will allow the Group to benefit from any future capital appreciation and (ii) generate a new source of rental income which can serve as the Group’s stable source of cash flow and revenue.”
Okura added that the net profit after tax generated from existing leases of the properties acquired came to JPY 27.9 million (US$273,000) for the year ended 30 June 2018 and JPY 23.5 million (US$230,000) for the year ended 30 June 2019.
RelatedPosts
