An aerial view shows Korea Electric Power Corp’s headquarters (centre) in Seoul. Hyundai Motor and its two affiliates approved Asia’s biggest property deal since the financial crisis yesterday.

Reuters/Seoul

Hyundai Motor Co and its two affiliates approved Asia’s biggest property deal since the financial crisis yesterday when their board members agreed to pay 10.55tn won ($10.12bn) for a trophy plot of land to house a new headquarters in downtown Seoul.

The Hyundai-led group – which includes Kia Motors Corp and Hyundai Mobis Co – agreed to the price, more than triple the appraised amount, prompting a sharp sell-off in the companies’ shares.

About 11.6tn Korean won ($11.11bn) have been wiped of the market values of the companies since the purchase was announced last week.

Labour union employees, who make up the bulk of the companies’ workforce, voted yesterday to extend a strike into next week in show of disapproval of the purchase which will be used to house a new headquarters, hotel and theme park complex.

“Building an integrated control tower will enhance work efficiency and brand value,” Hyundai Motor said in its regulatory filing yesterday.

The Hyundai-led consortium, which beat Samsung Electronics to buy the plot in the capital’s high-end Gangnam district, plans to ink the deal with the state-run Korea Electric Power Corp (KEPCO).

Shares of Hyundai Motor ended down 1.3% at 187,000 won each yesterday, their lowest level in 17 months. Kia Motors slipped 0.8%, and Hyundai Mobis was up 0.6%.

The $10bn price-tag is equivalent to selling nearly half-a-million of Hyundai’s flagship Sonata sedans, and nearly two years of combined wages for Hyundai’s 63,099 employees in Korea, according to Reuters’ calculation.

Hyundai Motor will pay 55% of the price, followed by Hyundai Mobis Co with 25% and Kia Motors Corp with 20%, the companies said. They did not disclose whether the board approval was unanimous.

The boards of the three companies had approved bidding at the September 18 auction without knowing the price, which was deemed confidential, four board members told Reuters earlier.

Board disapproval is rare at Korea’s family-owned conglomerates, or chaebols.

The land deal led to the domestic unions of Hyundai Motor and Kia Motors resuming partial strikes this week, clouding the outlook for annual wage talks.

Workers “are angered by the astronomical amount of money” to be spent on the land, Kia’s union said.

Hyundai Motor’s labour union said yesterday it would stage a partial strike from Monday through Thursday next week.

Hyundai, the world’s fifth-biggest automaker along with its affiliate Kia, has been hit by strikes in all but four years of the union’s 27-year history, although they usually make up losses with extra work later that year.

The stoppages comes as Hyundai and Kia are planning to build new factories in China and Mexico, closer to export markets and where wages are lower than in South Korea.

Recurring labour disputes, high wages at home and strong currency are expected to put further pressure on the automaker to accelerate overseas production. Hyundai made 62% of its cars last year overseas, up from 20% in 2004.

Since annual wage talks began in early June, Hyundai Motor and union negotiators have wrangled over a new wage calculation, which the company says would sharply increase labour costs.

Hyundai’s domestic employees, excluding executives, earn an average 94mn won ($90,419) per year.