A consortium led by Mirae Asset Financial Group was selected as a preferred bidder to build an oceanside resort complex in Gyeong Island in Yeosu, southwest of Seoul, allowing a chance for the country’s leading financial group to add leisure business to its investment portfolio.

Mirae Asset Consortium, consisting of Mirae Asset Financial Group and U.K.-based investment company Castlepines with a relative stake of 70 percent and 30 percent, offered to invest a combined 1.1 trillion won ($999 million) to construct the resort complex..

Mirae Asset Financial Group Chairman Park Hyeon-joo said that starting with the Gyeong Island project, the group will invest up to 2 trillion won in tourism development in other south coast regions and northeast Gangwon Province.

“In this prolonged low interest environment, investment in real estate and infrastructure is a safe bet that could generate 2 to 3 percent higher yields than the current market rate,” added the chairman.

The consortium plans to set up a foreign investment company in August and conclude negotiations on its investment details such as the size, types of facilities and payment terms with the local government’s Jeonnam Development Corp. by the end of this year. Jeonnam Development aims to decide the final preferred bidder by late August or early September and sign the final contract in November.

The consortium has plans to buy the land for the resort complex, as well as golf and resort facilities already in use in Gyeong Island at 342.3 billion won. Gyeong Island is one of resort islands in South Korea with a 27-hole golf course, a membership resort hotel with 100 rooms and a campsite.

If the Mirae Asset Consortium is picked as the final winner in the auction, it is expected to make an additional investment of 750 billion won over the next five years to construct a luxury resort complex with a hotel, villa, yacht club, water theme park and marine cable cars. The investment totaling about 1.1 trillion won would be the largest ever in the tourism and leisure investment in South Jeolla Province where Yeosu is located.

“We chose Mirae Asset Consortium as a preferred bidder among three candidates because it met all the qualifications required for the investment,” said Lee Nak-yeon, governor of South Jeolla Province. “The resort complex in Gyeong Island is expected to lead to additional investments in southwest coast regions,” the governor added.

Mirae Asset Financial Group has been aggressive in expanding its business and investments after it recently acquired a 43 percent stake in KDB Daewoo Securities for 2.33 trillion won and plans to launch the country’s largest investment firm Mirae Asset Daewoo Securities with 7.8 trillion won capital. In an interview in June, Chairman Park said the group plans to invest 10 trillion won over the next 10 years in startups in biopharmaceutical and healthcare sectors. According to investment banking sources last week, the group is likely to bid for PCA Life Insurance Co., a subsidiary of U.K.-based Prudential Group, to merge with its life insurance arm Mirae Asset Life Insurance Co.

Castlepines is a global investment company established in Sydney, Australia, in 2007, making long-term investments in natural resources, renewable energy, marine transport, ships and real estate. The company has about $7 billion in assets mostly raised from pension funds and institutional investors in the U.S., the U.K and countries in North Europe.

By Park Jin-joo and Kim Hye-soon

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