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A view of the Hyatt Regency Waikiki Beach Resort & Spa in Hawaii. (Photo courtesy of the hotel’s official website) |
[Alpha Biz= Kim Jisun] Mirae Asset Financial Group is set to sell a Hawaii resort it acquired in the past as part of efforts to streamline its overseas real estate portfolio, according to an exclusive report by the Seoul Economic Daily.
According to investment banking sources cited by the Seoul Economic Daily on January 22, Mirae Asset Global Investments is in the final stages of negotiations to sell the Hyatt Regency Waikiki Beach Resort & Spa, located on Waikiki Beach in Oahu, Hawaii. The deal value is estimated at approximately KRW 1 trillion, or about USD 680 million, with a global asset manager reportedly discussing the acquisition through a fund structure.
While the two sides are close to reaching a broad agreement on price, negotiations are continuing over potential post-acquisition costs, including renovation and maintenance expenses. JLL’s global headquarters is advising on the sale, while legal counsel is being provided jointly by Yulchon and a U.S.-based law firm.
Situated directly in front of Waikiki Beach, the Hyatt Regency resort consists of two 40-story towers with a total of 1,230 guest rooms and is widely regarded as a landmark property in the area.
Mirae Asset acquired the resort in 2016 from Blackstone for approximately USD 780 million, or about KRW 900 billion at the exchange rate at the time. The acquisition was made through the MAPS Frontier U.S. Real Estate Fund No. 7, managed by Mirae Asset Global Investments, with Mirae Asset Securities participating as a major investor. Part of the purchase price was initially financed through local lenders, followed by additional capital injections from Mirae Asset Securities and other affiliates.
Mirae Asset Group began expanding into overseas hotel and resort assets in May 2013 with the acquisition of the Four Seasons Hotel Sydney, followed by the Fairmont Orchid in Hawaii in March 2015 and the Fairmont San Francisco in September 2015, seeking asset appreciation and stable cash yields of around 6–7%.
Although the investments initially generated stable returns, profitability across hotel and resort assets deteriorated following the COVID-19 pandemic in 2020. As of the third quarter of last year, the book value of Mirae Asset Securities’ fund stake in the Hyatt Regency had declined to KRW 137.2 billion, compared with KRW 604.9 billion at the time of acquisition.
While the downturn in the hotel and resort sector weighed on early-stage sale discussions last year, recovering global tourism demand and foreign-exchange gains have since pushed up the expected sale price. Although the dollar-denominated sale price is slightly below the 2016 acquisition level, the weaker Korean won means the transaction value in won terms is expected to approach KRW 1 trillion.
Mirae Asset Group aims to expand its asset management business by increasing exposure to the digital asset ecosystem, while accelerating proactive global investments, including its stake in SpaceX, which is expected to generate substantial capital gains.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
