A consortium from Korea - Hana Financial Investment Co., NH Investment & Securities Co., and Meritz Securities Co. - acquired Hilton Vienna hotel in Austria for $375 million, an investment expected to deliver an annual return of 7 percent.

According to local investment industry sources on Wednesday, the Korean brokerage consortium will invest $170 million and have the remainder financed through local financial institutions for the $375 million acquisition. The seller of Hilton Vienna is reported as an Austrian real estate investment company whose name was not disclosed.

The buyers plan to make the investment through a fund to be created by Seoul-based Mastern Investment Management, and then sell down the fund to other institutional investors. The expected return is around 7.5 percent per annum.

Hilton Vienna is located in the central business district of Vienna, which is a host to many international organizations, including the United Nations and OPEC. The hotel has 660 some guest rooms, the largest in Austria. Hospitality giant Hilton has been operating the hotel for nearly 40 years and last year renewed a master-lease agreement for 20 years with a 10-year tenant renewal option.

The hotel plans to spend $75 million out of the new investment fund on remodeling. The seller will be compensating for any operating losses expected to incur during the remodeling period, which is to last for a year.

By Chung Seok-hwan and Cho Jeehyun

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