SoftBank, Oyo buy $100m stake in Japanese apartment rental firm, source says

Japan’s SoftBank Group and Indian hospitality brand Oyo Hotels and Homes have jointly acquired an 80% stake in Japanese apartment rental firm MDI for over US$100 million, a source familiar with the matter told Nikkei Asian Review.

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Photo credit: Oyo

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A spokesperson for Oyo said in an email that the company looks to “leverage MDI’s strong network and business development capabilities in Japan’s real estate market.” MDI recently posted revenues of about US$1 billion in the fiscal year ending March, according to the report.

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Oyo, however, declined to comment on the price and details pertaining to their stake in the joint buy, and both SoftBank and MDI declined to speak on the matter as well.

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“Real estate is a capital-intensive business. The involvement of SoftBank is a strong endorsement for Oyo in Japan,” said the source.

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According to the report, Oyo is planning to list part of the 37,000 rooms operating under MDI management on its Oyo Life apartment rental brand in Japan. It currently has more than 2,000 rooms in its inventory in the country.

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Oyo launched the platform in Japan back in March through a joint venture agreement with Yahoo Japan. It lets users find, rent, and leave apartment rooms via a smartphone app and targets millennials who prefer to rent rather than buy properties.

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SoftBank and Oyo started working together in the country in April, launching a hotel joint venture which aims to capitalize on Japan’s growing popularity as a tourist destination.

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Prasun Choudhary, who helped launch Oyo’s other global businesses, was tasked to serve as operating partner for Oyo Hotels Japan.