IGIS Asset Management Co., a leading South Korean real estate investment firm, has chosen Deloitte Anjin LLC as its lead manager to sell Four Points by Sheraton Josun, Seoul Myeongdong, a four-star hotel in a popular spot for foreign tourists in Seoul.
According to investment banking industry sources on Wednesday, IGIS Asset and Deloitte plan to begin bidding by the end of June to shortlist potential buyers and designate the top bidder.
The hotel, a 26-story building with three underground floors and a total floor area of 21,658 square meters, has 375 rooms and other facilities.
It is leased and operated by Josun Hotels & Resorts Co., a subsidiary of Korea’s largest supermarket chain E-Mart Inc. Its lease expires in 2040.
IGIS bought Four Points by Sheraton Josun, Seoul Myeongdong, for 166.5 billion won ($115.1 million) from local property developer SK D&D Co. in 2020.
IGIS raised money for acquisition through the core property platform fund 1, which was created by the National Pension Service (NPS) in 2016. The asset manager put the hotel up for sale as the fund neared maturity.
PRIME ASSETS
The upcoming bidding process is expected to gauge investor sentiment amid a recovering hotel investment market in Korea, with interest centering on prime hospitality assets in Seoul’s core districts.
Investors at home and abroad have already shown interest in Four Points by Sheraton Josun, Seoul Myeongdong as it is a relatively new four-star hotel in Myeongdong, super-prime real estate in the country.
Investment in Korean hotels is booming, thanks to a recovery in tourism.
Hotel transactions in the country are predicted to jump 35% to 2.2 trillion won this year from 1.6 trillion won in 2024, according to global real estate services company Jones Lang LaSalle Inc. (JLL).
RIGHT OF FIRST REFUSAL
Industry watchers said that Josun Hotels & Resorts’ right of first refusal (ROFR) could emerge as a key variable in the sale of the four-star hotel in Myeongdong.
The hospitality group had ROFR for properties such as Gravity Josun Seoul Pangyo and Four Points by Sheraton Josun, Seoul Station, but didn’t exercise its rights.
Four Points by Sheraton Josun, Seoul Station was sold to KB Asset Management, a subsidiary of KB Financial Group.
“Among recent hotel listings in Seoul, Four Points by Sheraton Josun, Seoul Myeongdong stands out as the most attractive asset,” said an industry official. “Josun Hotels & Resorts will likely assess the final bid price before deciding whether to exercise its right of first refusal.”
By Gyeong-Jin Min
min@hankyung.com
In-Soo Nam edited this article.
