Distribution rates for hotel-backed real estate digital securities (STs) range from 2.5% to 5.6% across the 5 disclosed projects, while acquisition prices per room vary widely, from approximately ¥9.6 million to ¥188.01 million. Differences in leverage ratios affect the funds available for distributions, although some projects are structured entirely with equity.
A comparison of the 5 disclosed hotel-backed digital securities (STs) shows fractionalized investments priced at ¥100,000 to ¥1 million per unit, expected distribution rates of 2.5% to 5.6%, and, in some projects, investment periods exceeding 10 years. The project backed by the Yokohama Isezakicho hotel has a unit price of ¥500,000, an expected annual distribution rate of 4.1%, and an all-equity structure. Meanwhile, projects in Kyoto Sanjo and the Maihama area offer distribution rates of 3.5% to 5.6%, with differences arising from their capital structures, including leverage ratios.
The analysis in Table 2 shows a wide range in acquisition prices per room, from ¥9.6 million in Yokohama to ¥188.01 million at W OSAKA. Distribution rates tend to move inversely to these prices, with projects involving larger assets and higher prices per room generally showing lower distribution rates. The Yokohama project is structured entirely with equity and does not use borrowings, targeting greater cash flow stability without relying on leverage.
The LTV sensitivity analysis shows that distribution yields rise as leverage increases. However, when higher interest rates coincide with downside risk to NOI, the gap narrows, with the increase in yield at 60% LTV shrinking to only around 0.15 percentage points. The borrowing terms for the Kyoto project explicitly include a floating interest rate based on yen TIBOR and refinancing risk, indicating the impact of its long-term investment period of more than 10 years. Accordingly, the all-equity vehicle can be viewed as targeting stable cash flows by avoiding interim interest-rate risk, while forgoing the additional yield available under normal conditions.
In comparison with REITs, the median value per room for domestic properties held by 7 listed hotel REITs is ¥24.41 million, placing the Yokohama project's ¥9.6 million per room in the lower range of the distribution. The highest-priced assets, at ¥120.29 million per room in Kyoto and ¥188.01 million per room at W OSAKA, are exceptionally rare high-value assets even within REIT portfolios. STs span both ends of the price spectrum, covering low- and high-priced assets that REITs do not purchase.