Sunkyung E&C and Korea Overseas Infrastructure & Urban Development Corporation (KIND) arranged a 150 billion-won worth ($126.5 million) S&D Hanoi project to build a new six-star mega hotel complex in Hanoi, Vietnam, Paxnet News reported on August 12.
Sunkyung E&C and KIND will inject 70 to 80 billion won and 40 billion won respectively to create the fund and will manage it through a special purpose company (SPC). This project will be a new challenge for Sunkyung E&C as the company has focused on the construction and development of the logistics center.
Lotte E&C was ordered to build a six-star Lotte hotel, a serviced residence, and other complex facilities by Sunkyung E&C. The site where Sunkyung E&C is seeking to develop the hotel is located near the Ho Tay (West Lake) on the northwestern outskirts of Hanoi’s old city center. Ho Tay region is known as the place where the nouveau riche gather as urban development projects are carried out there.
Sunkyung E&C has recently been expanding its scope into a development project, purchasing and developing sites directly. The company is also applying this business model in this Vietnamese hotel project. Sunkyung E&C had carried out four projects in Vietnam except for the S&D Hanoi project. Among them, Logis valley Bac Ninh one and two were acquired by Mirae Asset-Naver Asia Growth Fund, jointly created by Mirae Asset Financial Group and Naver. The fund paid 53 billion won.
Industry watchers said that Sunkyung E&C is using the money from the sale of two logistics centers in Bac Ninh in the hotel construction project. Korean companies are facing challenges bringing the profits from Vietnam to Korea as the Vietnamese Government is refusing to approve the transfer or setting the amount of tax or land compensation fee higher than the average of local companies.
“Sunkyung E&C has been looking for investment targets with KIND and Lotte Group to reinvest in the Vietnamese market since the sale of Bac Ninh,” a construction industry source said. (Reporting by Hyewon Chang)