KTB Asset Management Co. has invested 56.9 million pounds ($79 million) in a five-star hotel in London with Korean institutional investors including a life insurance company.
According to sources from the industry, the Korean asset management firm has launched a real estate fund to invest in mezzanine debt worth $79 million extended to Grosvenor House, a JW Marriott Hotel, in London.
The investment period is seven years, and three Korean institutional investors including a life insurance company and mutual aid association joined the fund, according to the sources.
The expected annual returns are not known. Industry observers expect the fund would gain a stable return as the five-star JW Marriott Hotel is located in Mayfair, an affluent area in the west end of London nearby tourist attractions like the Hyde Park.
The luxury hotel was built in 1929 and then came under management of JW Marriott in 2008 after renewal.
“Five-star hotels in London have emerged as an attractive investment target generating stable gains as a weaker pound has added tourist appeal,” said an official at KTB Asset Management. Amid the robust demand for debts extended to European properties, the Korean asset management plans to further expand its investment in European regions.
KTB Asset Management manages alternative investment funds worth 2.24 trillion won ($2.1 billion) at home and abroad, and about 52 percent, or 1.17 trillion, is assigned to the investment in overseas assets like real estate assets. It has been focused on investment in various offices, hotels and retail properties in major industrial and commercial districts in the U.S., Japan and the U.K. since it jumped into the alternative investment business in 2016.
By Cho Hee-young and Lee Ha-yeon
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