
CDL continues its hotel divestments with sale of the Millennium Hilton Seoul hotel to IGIS
City Developments Ltd (CDL) is set to sell the Hilton Millennium Hotel in Seoul, along with an adjoining site, to local fund manager IGIS Asset Management for KRW 1.1 trillion ($930 million) as the Singapore-listed developer continues to divest loss-making hotels.
Singapore’s biggest non-government-controlled developer said Monday that it has entered into an agreement with Korea’s IGIS Asset Management, the largest real estate fund manager in Korea, for the sale and purchase of the 22-storey Millennium Hilton Seoul hotel and an adjoining 1,564 square metre (16,835 square foot) freehold land parcel in the heart of the capital city.
IGIS, which has $34 billion in Asian real estate assets under management, is planning to convert the site into a complex combining grade A offices, a five-star hotel and retail space, to take advantage of its proximity to transport networks such as Seoul Station, company representatives confirmed to Mingtiandi on Monday.
The planned redevelopment of the 82,856 square metre hotel into a mixed-use development comes as conversions of hospitality properties for commercial purposes sparks a rebound in purchases of hotels around the region, according to a recent report by JLL.
Seoul Struggles
In announcing the sale CDL noted that the performance of the 1983 vintage asset, “has been trending negatively over the years,” with that futility further exacerbated by the pandemic. However, CDL executive chairman Kwek Leng Beng said the firm had held out for the right offer.

CDL executive chairman Kwek Leng Beng
“Since acquiring Millennium Hilton Seoul in the late 1990s, we have steadfastly invested in the hotel, driven optimal performance and extracted good value from the property,” Kwek said. “We have always believed that this would be an asset that could provide tremendous value to shareholders at the right time and at the right price.”
In 2020 CDL’s hospitality business incurred pre-tax losses of S$573.4 million, providing the company with extra impetus to sell assets to boost cashflow.
Expected to close by 28 February next year, the proposed divestment of the property at the foot of Seoul’s Namsan Mountain is estimated to provide CDL with a net gain of S$529.73 million ($387.28 million) with the group saying it had received multiple offers for the property.
The transaction’s agreed price represents a premium of KRW 835.17 billion over CDL’s net book value for the property as of 30 November 2021 the company said, with the deal equivalent to KRW 13.28 million per square metre of the hotel’s gross floor area, not counting the size of the adjoining undeveloped plot,
CDL had acquired the 709-room hotel, which includes 680 guest rooms and 29 suites, from Korea’s now-defunct Daewoo Group in 1999 for $213.5 million. In 2013 the Singaporean firm followed up by purchasing the adjacent freehold land plot from local construction firm Woo Yang Industrial Development for KRW 29.5 billion.
CDL Hotel Sell-Down Continues
The sale of the Hilton Millennium Seoul marked CDL”s fourth and largest sale of a Millennium & Copthorne Hotels hospitality asset since CDL took its hotel unit private in late 2019, just before the COVID-19 pandemic brought the industry to its knees.

CDL expects to close its sale of the Millennium Harvest House Boulder next year
“We remain confident of the global hospitality recovery with pent-up demand,” CDL’s Kwek said. “We will continue to review and fine-tune our portfolio to accelerate the Group’s growth and transformation while enhancing shareholder value.”
London-based M&C manages and operates 145 hotels across Asia, Europe, the Middle East, New Zealand and the United States.
After its privatization, M&C in December 2019 sold the Millennium Hotel Cincinnati in Ohio before the pandemic temporarily delayed its restructuring plans.
The company followed up months later with the disposal of the Copthorne Hotel Birmingham in the UK during the third quarter of 2020 and the disposition of the Copthorne Orchid Hotel & Resort Penang in Malaysia in December of last year. CDL said it is also expecting to complete the sale of the Millennium Harvest House Boulder in Colorado next year with these three disposals bringing it a combined sales value of around $130.9 million.
In August 2020 the company had also sold the site of the former Copthorne Hotel Christchurch Central in Christchurch, New Zealand for an undisclosed amount with the hotel having been shuttered since being damaged in an earthquake in 2011.
Conversions Boost Hotel Deals
CDL’s latest disposal points to a trend which indicates that the brightest future for hotel assets could involve redevelopment for alternative purposes.
Property consultancy JLL said in an October report that a rebound in the commercial sector provided some hope to hotel owners marketing properties with conversion potential, with that redevelopment wave potentially pushing investments in Asia Pacific’s hospitality sector to $7 billion by year’s end
That mark would represent a 15 percent increase from 2020’s transaction level, with the firm noting an trend toward redeveloping large, well-located hotels in Korea for residential and commercial uses will likely continue moving forward.
“Amidst the current backdrop, hotel properties are primarily being sought after for conversion potential or with stable master leases in place,” the report said of the South Korean market.
The redevelopment trend has also been evident in Hong Kong, where US developer Hines late last month revealed that it had teamed with a local investment firm to purchase the 158-room Butterfly on Prat Hotel for conversion into a residential complex.
With the Hines deal reportedly taking place at around $118.6, Mingtiandi reporting at the end of November that Blackstone had acquired an industrial building in Hong Kong which had been slated for conversion into a hotel asset, with the US fund manager converting that property in Shau Kei Wan into a self-storage facility.
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