Paradise Accelerates Development of Jangchung-dong Luxury Hotel... Headquarters Relocation on the 13th

Long-Awaited Project 'Jangchung-dong Luxury Hotel' Development Construction Kicks Off
Aiming to Establish a Top-Class 5-Star Hotel and Regional Landmark
Headquarters on Planned Hotel Site in Jangchung-dong Relocates to Ssangnim-dong, Jung-gu
Former Headquarters Site Transformed into a Hotel with 5 Basement Floors and 20 Above-Ground Floors

[Asia Economy Reporter Yuri Kim] Paradise Group is set to fully launch the development of a luxury hotel in Jangchung-dong, Jung-gu, Seoul, a long-awaited project. Construction, which had been stalled due to the THAAD issue and the impact of COVID-19, is expected to gain momentum with the advent of the endemic phase (periodic outbreak of infectious diseases). The company aims to establish the first Seoul hotel under the Paradise brand as a top-tier 5-star hotel and a regional landmark.

According to industry sources on the 12th, Paradise will relocate its headquarters from the hotel site to Ssangnim-dong, Jung-gu (299 Toegye-ro) on the 13th, right after the Chuseok holiday, to accelerate construction. After deciding on the new headquarters, the building name was recently changed to Paradise Building. Eleven out of the 15 floors will be used as a hub office for employees of the headquarters and affiliates.

The area around the former headquarters building in Jangchung-dong is planned to be transformed into a luxury hotel with five basement levels and 20 floors above ground. The hotel is planned to have 230 rooms. A Paradise representative said, "We are currently coordinating the business plan to reflect changes in the times."

Paradise, which operates hotels and casinos domestically, had long sought to build a luxury hotel on the Jangchung-dong site. Paradise received approval for the construction of a tourist accommodation facility from Jung-gu Office in June 2016 for the Jangchung-dong hotel development, and subsequently submitted a construction notification to Jung-gu Office in May 2018 and began construction. However, during the project, the THAAD issue and the COVID-19 situation caused a sharp decline in visitors from China and other overseas tourists, stalling construction progress. The existing business was also inevitably impacted. Construction had almost come to a halt after partial demolition of some buildings.

However, with the onset of the endemic era this year, the company judged that it is the right time to strengthen the core businesses such as hotels and casinos while also fully advancing the long-awaited Jangchung-dong hotel construction, leading to the relocation of the headquarters and other active moves. To strengthen existing business capabilities, a strategy office was established earlier this year, and Executive Director Kwon Jung-hyun, formerly of CJ Group and skilled in planning and management, was recruited as head of the strategy office. Along with business normalization, funds for the Jangchung-dong luxury hotel construction were secured. In June last year, Paradise secured 150 billion KRW in cash by selling the management building (office building) owned by its subsidiary Paradise Hotel Busan, and this year, it additionally secured 100.5 billion KRW by selling the Nonhyeon Building in Gangnam-gu, Seoul.

However, the completion date has not yet been finalized. The company plans to proceed flexibly while monitoring trends to ride the endemic wave, considering the burden of rising raw material prices due to inflation. A Paradise representative said, "As the external environment has rapidly changed due to COVID-19, we are carefully reviewing the business plan," adding, "We will focus the group's capabilities to carry out the project without setbacks and create a competitive hotel."

Meanwhile, Paradise, which has been acquiring land around the headquarters since aiming to develop the Jangchung-dong hotel, is also continuously negotiating the purchase of the Taegukdang main store site located right next to the hotel site. It is known that the purchase inquiry was made on the premise that Taegukdang would re-enter upon completion of the hotel construction. Taegukdang had previously declined repeated proposals from Paradise, so the conclusion is drawing attention. If Taegukdang accepts the proposal, it is expected to continue operations in a bakery within the hotel instead of the main store building that has been in place since 1973.

Panoramic view of Incheon Paradise City.