 |
Lotte New York Palace Hotel, Manhattan. (Photo: Provided by Lotte) |
[Alpha Biz= Paul Lee] Lotte Group announced on the 15th that it will acquire the land of the Lotte New York Palace Hotel in Manhattan from the Archdiocese of New York for USD 490 million (approximately KRW 720 billion).
Lotte New York Palace, a five-star hotel in Manhattan, was acquired by Lotte Hotels in 2015. At that time, Lotte purchased the building, The New York Palace Hotel, for USD 805 million (approximately KRW 1.1849 trillion), but had been leasing the land from the Archdiocese of New York. The lease was renewed in 25-year cycles, but with recent overall increases in New York land lease rates, Lotte decided to purchase the land outright.
Lotte stated that the land acquisition cost is lower than the cumulative lease payments, which is expected to improve operating cash flow. Additionally, the reduction of lease liabilities following the acquisition will lower the company’s debt ratio and strengthen financial soundness. Lotte Hotels plans to fund the acquisition through asset liquidation and external investment.
With the land acquisition, Lotte Hotels aims to enhance the hotel’s brand value, strengthen its presence in the global hotel market, and expand its hotel management and franchise business.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
