Goldman Sachs, in partnership with JB Asset Management Co., has acquired Mercure Ambassador Seoul Hongdae, a prominent mixed-use commercial property in Seoul, in a 262 billion won ($194 million) deal.
The deal marks the US investment bank’s first direct investment in South Korea’s hospitality sector.
JLL Korea, the local arm of global real estate services firm Jones Lang LaSalle Inc., advised on the sale, which saw the hotel near Hongik University (Hongdae) in central Seoul change hands from Hyundai Asset Management Co. to the new buyers.
JB Asset Management is a unit of a Korean provincial banking group, JB Financial Group, which owns Jeonbuk Bank.
Industry watchers said the deal, announced on Monday, reflects renewed confidence among global investors in Korea’s recovering tourism market and high-traffic retail hubs.
Mercure Ambassador, located near Hongdae’s bustling station served by both Seoul’s subway Line 2 and the airport express rail, spans over 17,000 square meters across 24 floors – six underground and 18 above ground.
The hotel’s lower levels serve as retail space, while the upper floors house 270 rooms under the four-star Mercure brand operated by the Ambassador Hotel Group.
GOLDMAN SACHS STEPS IN TO REPLACE SOTETSU HOTELS
JLL Korea handled the sale of Mercure Ambassador Seoul Hongdae twice – the first transaction with another seller in 2021.
The sale follows a complex process that began in July 2024.
The latest transaction, which initially included Japanese hotel chain Sotetsu as a co-investor, faltered after delays in the internal review process.
Goldman Sachs ultimately stepped in as a replacement investor – a rare move in the local real estate market.
The deal also includes a co-investment from the Ambassador Hotel Group, the property’s long-term lessee, further strengthening the income stability of the asset.
Retail leasing, a key consideration in the transaction, had faced uncertainty with anchor tenant SK Telecom Co. nearing the end of its lease.
However, e-commerce powerhouse Musinsa, already occupying space within the building, signed an extended lease, alleviating vacancy concerns.
INTEREST IN REBOUND OF KOREAN TOURISM
The deal marks a milestone not just for Goldman Sachs’ Korean investment portfolio but also for JB Asset Management, which has been increasingly active in cross-border and domestic real estate deals amid a broader shift by Korean asset managers toward alternative investments.
“This transaction shows international investors’ growing confidence in the rebound of Korea’s tourism sector and the long-term potential of the Hongdae commercial district,” said Lee Keehoon, head of capital markets at JLL Korea. “It also underscores continued demand from foreign institutions for well-located, income-generating assets in core submarkets.”
By Gyeong-Jin Min
min@hankyung.com
In-Soo Nam edited this article.
