Skiing in Japan to get a $2.2 billion upgrade close to Tokyo

By December, he expects to announce at least two to three winners of a hotel tender process that has attracted more than 10 bids from global giants.

Eventually, over at least three phases, Mr Chan anticipates it will take about 10 years and about ¥210 billion for his vision to reach fruition, with the mountains in the Myoko area filled with flagship boutiques and world-class dining.

He envisages travellers taking a four-hour chauffeured drive or a roughly two-hour bullet train from Tokyo before entering the luxury bubble, where they can ski in and out of resorts in winter, or 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, Mr Chan estimates.

The number of skiers and snowboarders in Japan has also been declining – down about 75 per cent in 2020 from its peak in the late 1990s, according to the Japan Productivity Centre. That means Mr Chan will need to rely on foreign tourists. It remains unclear how locals will take the influx of rich travellers and the workforce needed to service them.

Mr Chan is confident 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 Mr Chan was 6. After graduating from the University of Southern California, Mr Chan returned to Japan then Singapore to work in information technology and finance roles.

He 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 Corp.

“Ken’s been smart about bringing on investors to this project,” said Mr Sasaki, who met Mr 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.”

Special passion

After almost 20 years, Mr 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 is now in the market to raise ¥25 billion for a second residential fund, targeting annualised returns of 15 per cent.

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 owned 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 such as Madarao.

“Madarao has mainly been full of cheap tours with low-profit margins,” Mr 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 locals may dislike it.

In Nagano, 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,” Mr Wakabayashi said. “On the other hand, inbound visitors are expected to increase even more. So I’m glad to see revitalisation of the ski industry.”

Like many rural areas in Japan, the city of Myoko has had 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, Mr 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.”

Bloomberg