Lotte buys into Diamond Plaza

South Korea’s Lotte Group has replaced Posco as the foreign investor in a joint venture which owns and operates the Diamond Plaza, a commercial, office and apartment complex in downtown HCMC.

A source from Lotte confirmed the deal when reached by the Daily. The group’s chairman Shin Dong Bin mentioned the acquisition of the Diamond Plaza at a meeting with HCMC chairman Le Hoang Quan at City Hall on Wednesday.

Shin said Lotte has joined the management of the Diamond Plaza after acquiring 70% of the project. However, he did not reveal the amount of money the group had spent on the deal.

The Diamond Plaza was inaugurated in August 2000 with 22 floors, including two basements. The building, which overlooks the landmark Notre Dame Cathedral in HCMC’s District 1 and had an initial investment of some US$60 million, was the joint venture between Construction Corporation No. 1 (CC1) and Posco Engineering & Construction Co. (Posec) under Posco Group.

A source from the HCMC Department of Planning and Investment told the Daily that this agency has not received a request for change of the foreign partner in the joint venture as required by the relevant regulations.

The Diamond Plaza deal is yet another move of Lotte to deepen its involvement in Vietnam’s real estate market, particularly the commercial property segment, via mergers and acquisitions (M&A).

In 2013 Lotte bought a 70% stake of Japan’s Kotobuki at the Legend Hotel Saigon and the remaining 30% is now held by Hai Thanh Company, according to foreign property service providers. The five-star hotel was renamed as Lotte Legend Saigon in April last year and is now under the management of the hotels and resorts arm of Lotte.

The investment amount of Lotte in the 283-room hotel on Ton Duc Thang Street in HCMC’s District 1 remains unknown.

The group is expanding its presence in supermarkets and other areas as well. Retailer LotteMart has opened a commercial center in the Pico Plaza building in HCMC’s Tan Binh District. Earlier, a Pico shopping center in Hanoi was turned into a Lotte property.

At present, Lotte is proceeding with a US$2-billion property complex in District 2, HCMC. The Korean group will cooperate with Japanese investors to develop the Eco Smart City project in Thu Thiem New Urban Area.  

The group has invested billions of U.S. dollars in projects in hotel, food, supermarket, cinema, construction and home shopping sectors in Vietnam.