(Yonhap)

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Lotte Engineering & Construction Co. (Lotte E&C) is seeking to sell its headquarters in Jamwon-dong, Seoul, along with other non-core assets to secure liquidity amid s a financial strain.

According to the investment banking industry on Wednesday, Lotte E&C sent out requests for proposals to real estate consulting and accounting firms for the sale of its headquarters building and land. The company expects to raise around 500 billion won ($348.3 million) through the transaction.

Industry experts estimate the property’s value at over 400 billion won, factoring in development costs. In addition to its headquarters, Lotte E&C is reportedly selling warehouse assets in regional areas as part of its financial restructuring.

The headquarters, located at 29 Jamwon-ro 14-gil, Seocho-gu, is a five-story complex with a total floor area of 9,949 square meters. The company has used the site as its headquarters since 1980, dating back to its Lotte Peace Construction days.

Surrounded by residential complexes and near Sinsa Station - where Seoul Subway Line 3 and the Shinbundang Line intersect - the site is expected to attract interest from developers looking to convert it into residential facilities.

With the planned sale, Lotte E&C is likely to relocate, with Seoul’s Magok district emerging as a strong candidate. The company has previously been involved in constructing major office buildings in the area.

Lotte E&C, known for its premium residential brand Lotte Castle, has built a strong presence in the apartment and mixed-use residential building market. However, tightening real estate project financing (PF) conditions due to high interest rates have put pressure on its operations.

In response, Lotte E&C has been restructuring its large-scale projects. It abandoned the construction rights for Block 35 in Daejeon’s Doan district in September 2024, incurring an estimated 30 billion won loss. The project involved a 47-story mixed-use residential building complex with 1,041 units.

Another major project, the redevelopment of a former textile company site in Jeonju, is also in jeopardy. Financial institutions that provided bridge loans have withdrawn support instead of converting them into full PF, putting the project at risk of collapse.

Lotte E&C had 4.3 trillion won in PF-related guarantees as of September 2024, including 2.6 trillion won in bridge loans and 1.7 trillion won in full PF guarantees.

The broader restructuring efforts across Lotte Group have also impacted Lotte E&C. The group has been accelerating business reorganization, selling off non-core assets.

Lotte Group sold Lotte Rental Co. to Hong Kong-based private equity firm Affinity Equity Partners Ltd. in 2024. More recently, it sold Lotte Wellfood’s Jeungpyeong plant, Lotte Chemical Corp.’s Pakistan subsidiary, and Korea Seven Co.’s ATM business. Lotte Shopping Co. is also working on selling Lotte Department Store’s Centum City branch in Busan as part of its efforts to streamline operations.