Real estate private equity fund Haevichi Hotel & Resort Co., a unit under South Korea’s Hyundai Motor Group, along with other local institutional investors, will reportedly acquire the Westin Resort Guam for 150 billion won, or US$122 million. It is the first investment by Haevichi Hotel & Resort in an overseas property.
As South Korea's Pulse reports, the acquisition is seen as a move by Hyundai Motor Group to enhance its hospitality business.
The hotel is being jointyl acquired via a real estate private equity fund created by IGIS Asset Management Co. The hotel is currently operated by Starwood Hotels & Resorts.
Of the 150 billion won invested, 100 billion won will be invested together by NH Property & Casualty Insurance, Haevichi Hotel & Resort, and IGIS Asset Management while the remaining 50 billion won will be financed through loans from local financial institutions.
The resort is expected to undergo a renovation and continue to be operated by Starwood.
An official from the institutional investor industry told Pulse that "the investment in the Guam resort is cheaper than any other hotels in Korea but is more profitable as it brings a higher rate of return."
Meanwhile, the latest investment by Hyundai Motor Group signals the conglomerate has set its focus on expanding its hospitality business.
Recently, Hyundai Motor Group laid out a plan to build a hotel complex adjacent to its new 105-story headquarters building that is expected to be built by 2021 on the former site of Korea Electric Power Corporation headquarters in Samseong-dong, southern Seoul.