Lotte Group's Financial "Relief Pitcher"… Lotte Property & Development to Launch Yangpyeong-dong Real Estate Project

Purchase of Yangpyeong-dong Land and Buildings from Lotte Chilsung for 280 Billion Won

Aimed at Real Estate Development Projects

Expected Construction of Han River-Front Apartments

Supporting Improvement of Group Affiliates' Financial

Lotte Property & Development, the real estate development arm of Lotte Group, has taken on the role of a financial lifeline for the group, stepping in as a "relief pitcher."

According to industry sources on April 1, Lotte Property & Development announced the previous day that it had purchased land and buildings in Yangpyeong-dong 5-ga, Yeongdeungpo-gu, Seoul, owned by Lotte Chilsung Beverage, the group’s liquor and beverage affiliate, for 280.5 billion won. The purpose of the transaction is to pursue a real estate development project. The site is a Type 2 general residential area covering 21,217 square meters (approximately 6,400 pyeong), where it is possible to develop multi-family housing with a floor area ratio of up to 200% and a building coverage ratio of up to 60%. In particular, as the land overlooks Seonyudo, there are expectations that it can be developed into highly desirable riverside apartments along the Han River, which are sought after by the market.

Lotte World Tower. Provided by Lotte Corporation

Jang Jaehun, CEO of Lotte Property & Development, stated, "Based on a stable profit structure, we will continue to expand the discovery and investment in high value-added real estate," adding, "We are currently reviewing the optimal development plan for the acquired site, and we will proceed in a way that promotes mutual growth with local communities and regulatory authorities."

Lotte Property & Development appears to have returned to real estate development for the first time in about 10 years since the completion of the Jamsil Lotte World Tower and Mall, in order to support group affiliates that are focusing on liquidity management. Instead of selling this prime land to external parties, developing it internally for sales or leasing could ensure long-term profits and contribute to improving the group’s overall financial structure. Lotte Chilsung Beverage also explained, "We decided to sell the property to secure financial soundness and future growth resources," adding, "We plan to strengthen our core business competitiveness by securing liquidity and improving management efficiency."

This is not the first time Lotte Property & Development has acted as a pillar for the group. In June 2025, as Lotte Holdings was grappling with how to dispose of over 30% of its treasury shares amid moves to mandate share cancellation in the political sphere, Lotte Property & Development alleviated the situation by purchasing 5% of Lotte Holdings' treasury shares for 145 billion won. In November 2024, when Lotte Chemical faced the risk of an event of default (EOD) after failing to maintain an interest coverage ratio of at least five times EBITDA, which had been promised to investors as a covenant amid deteriorating business conditions, Lotte Property & Development also pledged the Lotte World Tower—valued at over 6 trillion won—as collateral to the banking sector.

Lotte Property & Development fully owns the Lotte World Tower, having acquired stakes previously held by Lotte Shopping and Hotel Lotte in 2021, and such tangible assets serve as its cash cows. In 2025, 3.743 trillion won, or 77% of Lotte Property & Development’s total revenue of 4.864 trillion won, came from rental income. With a debt ratio at around 80%, which is relatively sound compared to Lotte Holdings’ ratio of over 140%, there are expectations that Lotte Property & Development could provide further support to group affiliates with weaker financial conditions to help them secure liquidity.

Immediately, other prime sites slated for development include Lotte Chilsung Beverage’s Seocho site, which has a market value estimated at over 4 trillion won, the Sangam Lotte Mall owned by Lotte Shopping, and the Yeongdeungpo factory and Yangpyeong-dong headquarters site owned by Lotte Wellfood. However, a Lotte representative drew a line, saying, "No specific plans have been finalized regarding additional real estate development by affiliates."

This content was produced with the assistance of AI translation services.