DL, KT, and Lotte are selling their hotel assets amid a surge in foreign tourists, fueled by the global rise of K-content. These companies are liquidating real estate assets to strengthen their financial stability, while institutional and foreign investors are seeking opportunities in the growth potential of South Korea’s hotel sector.
According to the real estate industry on Dec. 12, DL Group is selling Glad Yeouido and Glad Coex hotels in Seoul, and Maison Glad Jeju to streamline assets and restructure operations. The sale price is estimated to be around 600 billion to 700 billion won ($420 million to $490 million) with foreign investors such as GIC, KKR, and Blackstone showing interest.
KT Group has also selected an advisory firm to facilitate large-scale real estate liquidation to raise funds for new growth areas like artificial intelligence (AI). Among the 20 properties under review are five-star hotels in Seoul, including Novotel Ambassador Dongdaemun, Andaz Gangnam, Sofitel Ambassador Seoul, and Le Méridien & Moxy Myeongdong. Lotte Group, which is facing liquidity concerns, announced plans last month to sell some of its hotels, including L7 Myeongdong, L7 Hongdae, and Ulsan City Hotel, to raise about 600 billion won.
A real estate fund manager explained, “With hotel demand outstripping supply, foreign investors view South Korea’s hotel market as highly promising. Corporations see this as the optimal time to secure high sale prices.” From January to October, around 13.74 million foreign tourists visited South Korea, a 54.7% increase compared to last year. Hotel occupancy rates in Seoul reached around 80% last month, fully recovering to pre-pandemic levels. According to real estate firm Rsquare, hotel transactions in Seoul, Busan, and Jeju during the first three quarters of this year totaled 2.16 trillion won, a sixfold increase from 360 billion won during the same period last year.
