Hong Kong-based investment firm PAG has been named a preferred buyer of Grand Hyatt Seoul and its nearby residential land which are valued at about 500 billion won ($415 million), two years after it acquired a Seoul office building for around 310 billion won.
Hyatt Hotels Corporation, the owner of the Seoul hotel chain, signed a memorandum of understanding on August 20 with PAG to sell the whole ownership of the property, according to real estate industry sources.
The price tag is in the range of 500 billion won, lower than the previously estimated 600 billion won range.
A definitive agreement is expected to be signed around October after a due diligence study.
Hyatt Hotels began the sale process in May soon after it completed the renovation of 615 guestrooms and suites of the hotel located on Mount Namsan in the center of Seoul.
It will continue to manage the Seoul hotel after the sale is completed.
PAG, formerly known as Pacific Alliance Group, was shortlisted among 10-odd preliminary bidders.
It is considering developing the 8,757-square-meter residential land surrounding the hotel as luxury houses to boost investment returns.
To fund the property deal, PAG is considering selecting South Korea’s Meritz Securities Co. Ltd. as an underwriter.
Constructed in 1978, Grand Hyatt Seoul is the most frequently-used accommodation by visiting heads of state, including US presidents.
In 2017, PAG acquired a 45,000-square-meter building in southern Seoul for about 310 billion won. The transaction price represented the highest per-unit price for an office building in the southern part of Seoul at the time.
PAG manages $30 billion in capital across private equity, real estate and other strategies.
JLL manages the sale of Grand Hyatt Seoul.
By Jung-hwan Hwang and Donghun Lee
<Edited by Yeonhee Kim>