Low interest rates in South Korea are driving foreign investment

Hyatt Regency Waikiki Beach Resort

Low interest rates in South Korea are driving investors there to seek out international opportunities for better returns—often in hotels. 

Some firms are paying record prices for assets in major tourism destinations like Hawaii and San Francisco. For example, Mirae Asset Global Investments is planning to purchase the leasehold on the Hyatt Regency Waikiki Beach Resort and Spa on Oahu for an estimated $780 million. The sale would be the biggest single-property hotel transaction ever in Hawaii, according to research firm Real Capital Analytics. It would mark Mirae’s second large hotel acquisition in Hawaii in the past 12 months. The company also purchased the Fairmont San Francisco in November.

South Korea’s family-run businesses have also recently made some major buys in recent years, like when the Lotte Group acquired the New York Palace hotel for $850 million. Korean Air Lines, meanwhile, is building a hotel and office complex in Los Angeles at a cost of $1.1 billion.

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


Even institutional investors are getting in on the action. South Korea’s Teachers Pension underwrote $77 million in mezzanine debt to fund investors’ purchase of the Westin St Francis hotel in San Francisco. 
 

Source: South China Morning Post

Suggested Articles

The absolute occupancy and RevPAR levels were the lowest for any Q3 in STR’s U.S. database.

Implementation of Volara’s contactless guest engagement and touchless room controls system is part of a rollout by Viceroy Hotels & Resorts.

U.S. hotel occupancy was virtually flat at 50.1 percent during the week of Oct. 11-17, according to the latest data from STR.