] South Korea’s pension fund has committed US$300 million to a fund managed by Starwood Capital Group to invest in hotels in the US, sources said on Dec. 29.
The National Pension Service, the world’s third-largest with assets of more than 520 trillion won (US$446 billion), has been showing appetite for US real estate assets, mainly large office buildings, but this is the first time that it is investing in US hotels.
The portfolio of the 4 trillion won SCG Hotel Investors Fund is comprised of 280 hotels in 40 states, including Marriott, Hilton and InterContinental Hotels Group.
The hotel fund will focus on business class hotels, targeting business travelers rather than tourists for their stable returns rather than luxury ones.
The pension fund expects the investment can yield over 10 percent annualized returns.
Apart from the NPS, Korea Investment Corporation has also committed US$100 million to the same fund.
By Park Han-na (firstname.lastname@example.org)