Singapore's CDL buys Nine Tree hotel in Seoul for $107 mn

Singapore-based major real estate firm City Developments Ltd. (CDL) has bought Nine Tree Premier Hotel Myeongdong II from South Korea’s Shinhan Asset Management Co. for 140 billion won ($107.2 million), CDL said earlier this week.

The 17-storey hotel is comprised of 408 guest rooms, meeting rooms, a restaurant and a fitness studio with a prime location in Myeongdong, a shopping mecca for foreign visitors to Seoul. The Nine Tree brand operates under Parnas Hotel, a luxury hotel unit of GS Retail Co.

Shinhan Asset bought the property for 130 billion won via its real estate investment trust (REIT) in 2017, when the hotel began operations.

CDL used its equity capital for the deal, without taking out a loan, said sources familiar with the matter. The Singaporean real estate giant secured ample liquidity by selling Millennium Hilton Seoul, which it bought for 260 billion won in 1999, to IGIS Asset Management for 1.1 trillion won in 2021.

The Nine Tree deal is CDL’s first investment since it sold Millenium Hilton Seoul. The real estate manager is considering buying more hotels, industry insiders said.

More investors are using their equity capital to fully finance deals, rather than taking loans at high interest rates, according to banking sources. 

In April of this year, Samsung Life Insurance Co. and Samsung Fire & Marine Insurance Co. together bought office tower AlphaDom Pangyo for 728.4 billion won from Mirae Asset Global Investments Co. The Samsung Group affiliates created the fund for the deal without borrowing money from a bank, sources said. 

Singapore-based Keppel Land Ltd. and Keppel Capital Holdings Pte., units under multinational conglomerate Keppel Corp. acquired Samhwan Building, an office tower in Seoul for 220 billion won last December. The companies used minimal leverage for the deal amid rate hikes, according to sources.  

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com

Jihyun Kim edited this article.