LOTTE DIS­MISSES ‘SKY­SCRAPER CURSE’

Group op­ti­mistic de­spite de­lay­ing open­ing of ob­ser­va­tion deck at tower to April 3

New Straits Times - - Business -

SEOUL/HONG KONG

THE glass-bot­tomed ob­ser­va­tion deck sit­ting 118 storeys up in the Seoul sky isn’t for the faint of heart. That con­di­tion would ap­ply to the tower’s builder, the beleaguered Lotte Group, as well.

Af­ter al­most seven years of plan­ning and four tril­lion won (RM15.95 bil­lion) in spend­ing, the con­glom­er­ate is pre­par­ing to un­wrap its Lotte World Tower to the pub­lic. The build­ing boasts some record-set­ting ameni­ties: high­est glass floor at the top of a build­ing and high­est swim­ming pool.

Yet the de­but couldn’t come at a worse time for Lotte, the chae­bol with US$81 bil­lion (RM358.83 bil­lion) in rev­enue that may be the lat­est vic­tim of what’s called the “sky­scraper curse”.

The em­pire’s 94-year-old founder and three of his chil­dren face cor­rup­tion charges, and its stores are at the epi­cen­tre of Chi­nese con­sumer re­tal­i­a­tion for a United States mis­sile-de­fence sys­tem be­ing in­stalled on land it pro­vided.

“Lotte is kind of the per­fect storm in terms of vul­ner­a­bil­ity,” said An­drew Gil­holm, Shang­haibased prin­ci­pal and di­rec­tor of anal­y­sis for Greater China and North Asia with Con­trol Risks. “They’re in sec­tors that are very ex­posed.”

“South Korea is def­i­nitely fac­ing a lot of dif­fi­cul­ties at home and abroad,” said Moody’s An­a­lyt­ics econ­o­mist Emily Dabbs in Syd­ney. “Over the next year, we are go­ing to see a low-growth en­vi­ron­ment.”

Record-set­ting sky­scrapers and eco­nomic hard times were no strangers, said An­drew Lawrence, Hong Kong-based founder of Ocu­lus Re­search Asia and cre­ator of the Sky­scraper In­dex.

New York’s Em­pire State Build­ing de­buted dur­ing the Great De­pres­sion; work on the Petronas Tow­ers fin­ished dur­ing the Asian fi­nan­cial cri­sis of the late 1990s; and Dubai’s Burj Khal­ifa opened in 2010 as the prop­erty market there col­lapsed.

Lotte’s 123-storey tower got a taste of that mis­for­tune on Mon­day, when the con­glom­er­ate said the open­ing of the ob­ser­va­tion deck sched­uled for to­day would be de­layed un­til at least April 3, fol­low­ing an el­e­va­tor mal­func­tion.

Lotte isn’t buy­ing into talk of a curse, say­ing yes­ter­day its tower and ac­com­pa­ny­ing Lotte World Mall would gen­er­ate 10 tril­lion won in eco­nomic ben­e­fits a year and at­tract 50 mil­lion tourists.

“There are sev­eral cases where land­mark sky­scrapers around the world have good im­pact on the lo­cal econ­omy,” said Lotte in a state­ment. “Lotte de­cided to de­lay the open­ing in an ef­fort to keep safety as a pri­or­ity.”

South Korea’s gross do­mes­tic prod­uct is ex­pected to grow by 2.5 per cent this year, ac­cord­ing to a sur­vey by Bloomberg News, and that would be the low­est since 2012. Bloomberg

BLOOMBERG PIC

Lotte Group has pushed back the open­ing of the ob­ser­va­tion deck at Lotte World Tower, sched­uled for to­day, due to an el­e­va­tor mal­func­tion on Mon­day.

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