GIC at forefront of $413-mn deal to buy hotels from South Korea’s DL Group

Other contenders chasing after the hotels were Blackstone, KKR and SC Capital Partners

GLAD hotel in Seoul (Courtesy of DL) 
GLAD hotel in Seoul (Courtesy of DL) 
Gyeong-Jin Min 2
2025-02-12 15:39:19 min@hankyung.com
Real estate

Singapore sovereign wealth fund GIC Pte. has been given priority rights to buy three hotels valued at more than 600 billion won ($413 million) together in South Korea from the country’s petrochemical-to-construction conglomerate DL Group seeking to exit from the accommodation industry.

According to investment banking industry sources on Tuesday, DL Group picked GIC as the preferred bidder to take over the three hotels in Korea operated by DL’s hospitality subsidiary Glad Hotels & Resorts Co.

Two business hotels in Seoul and a tourist hotel in Jeju, Korea’s popular resort island, are up for grabs, and their total value is estimated at more than 600 billion won, according to IB sources.

GIC beat other big contenders – US alternative asset manager Blackstone, global private equity giant KKR & Co. Inc. and Singapore-based real estate investment company SC Capital Partners – who joined the hotels’ auction in December, said sources.

In November last year, The Korea Economic Daily exclusively reported that the Korean conglomerate was looking for a new owner of its hotels as part of its efforts to restructure its business to focus on core ones, such as chemicals, construction and energy.

FOCUS ON CORE BUSINESSES

Medical latex plant in Singapore built by DL E&C (Courtesy of DL)
Medical latex plant in Singapore built by DL E&C (Courtesy of DL)

Following the divestiture of its hospitality assets, DL Group is expected to permanently leave the accommodation industry nearly four decades after it advanced into the business by acquiring a local hospitality company in 1986.

It already sold off three other hotels in Seoul in 2019 five years after it launched hotel brand GLAD in 2014. It suspended its hotel business restructuring during the COVID-19 pandemic, which clobbered the hospitality industry across the world.  

Following the end of the pandemic, the global hotel industry recovered fast, paving the way for DL to resume the restructuring of its hotel business.   

With the proceeds from the bundle sale of the three hotels, DL is expected to speed up its business reorganization centered around mainstay businesses.

The group’s two backbone businesses are the construction unit DL E&C Co. and the chemicals company DL Chemical Co.

The construction affiliate’s operating profit shrank 18.1% on-year to 270.9 billion won in 2024 amid the country’s construction industry slump.

Glad Hotels & Resorts reported an operating profit of 25 billion won in 2023, up 42.5% from 2022, as sales rose 12.8% to 104.7 billion won. The hotel operator logged a loss of 2 billion won during the pandemic.

Write to Gyeong-Jin Min at min@hankyung.com

Sookyung Seo edited this article.

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