Lotte Group to directly control global real estate unit

Lotte Corp., the fifth-largest conglomerate in South Korea, is poised to strengthen its real estate development unit under the direct control of the group and expand its global property business.

Lotte Property & Development Co., the real estate unit, has been slow in global businesses since China’s ban on importing Korean products in retaliation for Seoul’s decision to install Terminal High Altitude Area Defense (THAAD) in Korea in 2016.

The real estate developer, operating the world’s sixth-tallest building Lotte World Tower in Seoul, said on Feb. 6 it has been under the direct management of the parent group Lotte since last month. Previously, it was within the group’s hotel operation unit.

The parent group is ramping up its future growth engine and established affiliates such as Lotte Biologics Co., a medical contract development manufacturing organization (CDMO), and healthcare service provider Lotte Healthcare Co. last year.

The group’s logistics and construction affiliates are expanding their presence in Vietnam and other Asian countries. Lotte Property & Development will act as the control tower of their global businesses, according to an official from the group.

OFFICE, RETAIL BUSINESSES IN VIETNAM

The group has distinguished itself as a real estate developer and manager since the 1980s, establishing Lotte Hotel, Lotte Department Store and theme park Lotte World in Jamsil, a residential area in southeastern Seoul.

The real estate unit has secured a stable stream of cash flow from Lotte World Tower, which touts luxurious residences and prime offices.

The company fully owns the skyscraper and upscale shopping center Lotte World Mall, as well as manages Seoul-based office buildings Signature Tower and Gangnam N Tower.

Lotte Property & Development will lead the expansion of the group’s presence in Vietnam. The company acquired a 77.5% stake in Lotte Center Hanoi, an office tower and the third-tallest building in the Southeast Asian country, from the group affiliates including Hotel Lotte Co. and Lotte Shopping Co. The real estate unit will also start asset management of Lotte Mall Hanoi, a shopping center that will open in August.

Write to Jong-Kwan Park at pjk@hankyung.com
Jihyun Kim edited this article.