VietNamNet Bridge – Vietnamese have got familiar to the Korean culture, and they have joined hands with South Korean investors. The third South Korean investment wave has begun in Vietnam, with the big changes in the investors’ tastes.

It surprised all the Saigonese when they realized that Legend Hotel, which had been existing for 10 years in HCM City, changed its name into Lotte Legend Hotel.

The hotel’s name was changed because it has a new owner – Lotte Hotels & Resorts, a subsidiary of Lotte Group, an investor from South Korea. Sources said that Lotte spent $63 million, or VND1.3 trillion to buy 70 percent of stakes of the hotel.

The office building owned by Gemadept, which is located not far from the hotel, has been eyed by CJ, a big investor also from South Korea. The investor reportedly conducts negotiations with Gemadept to buy the office building to turn it into the head office of the group in Vietnam.

The two affairs are just a part of the new investment wave from South Korea.

When Korean spends money in Vietnam

The Lotte’s move of buying Legend hotel is a part of the South Korean group’s strategy to jump into the tourism and hotel sector to expand its business scale in Vietnam.

Besides Legend, Lotte has also bought a high end hotel in the central city of Da Nang and it is building a 5-star 65 storey in Hanoi, capitalized at $400 million – Lotte Center Hanoi.

Lotte has also conducted many other commercial affairs. According to StoxPlus, a finance service provider, the group has increased its ownership ratio from 80 percent to 100 percent in Lotte Vietnam shopping mall. It has also become the only owner of Lotte Mart, a distributor.

The investment license granted to Lotte Mart in October 2006 showed that the distributor had the chartered capital of $65 million, of which the Vietnamese Minh Van Trade and Production Company Ltd contributed $13 million, or VND260 billion, while Lotte contributed $52 million.

The joint venture has developed two shopping malls in HCM City so far, namely LotteMart in district 7 and the other at The EverRich building.

According to the HCM City Planning and Investment Department, Lotte has increased its chartered capital of Lotte Vietnam Shopping Mall Company Ltd from $65 million to $120 million. The move is believed to help better develop more projects in Vietnam.

In August 2012, Lotte bought the Phan Thiet Shopping Mall project from Nam Bay Bay Company, the value of which, according to StoxPlus, was $4.5 million. Lotte is now building a shopping mall – Lotte Phan Thiet – on the land plot.

The number of shopping malls owned by Lotte is expected to increase rapidly, since the investor has decided to have 60 supermarkets in Vietnam instead of 30 as initially announced.

Another big guy from South Korea – CJ Group – has also made big steps in the Vietnamese market. In 2011, CJ bought 80 percent of stakes of Megastar, a media company, at $73.6 million from Envoy Media Partners (Virgin Islands).

In late 2012, CJ cooperated with Vietnamese CT Group to build and develop the logistics system in Binh Duong, Da Nang and Bac Ninh. Under the cooperation agreement, CT Land develops the storehouse network, while CJ would be in charge of providing technologies.

The South Korean reportedly contributes $20 million to the project on the Song Thanh Logistics Center in Binh Duong province.

CJ Freshway, a food brand of CJ, has also entered the Vietnamese market by joining forces with Hoa Lam Company to set up a joint venture which would provide processed food.

The number of CJ invested projects in Vietnam would increase further in the time to come. Guk Sang Kim, CJ Chief Representative, said the group is considering 3-4 more projects with the minimum investment capital of $500 million.

NCDT