[Alpha Biz= Paul Lee] Josun Hotels & Resorts, the hospitality arm of the Shinsegae Group, has teamed up with Pacific Asset Management and Meritz Securities to acquire two major hotel properties in Seoul and Pangyo. The move comes as South Korea’s hotel sector experiences strong momentum driven by a surge in inbound tourism.
According to investment banking industry sources on November 27, Pacific Asset Management has finalized the acquisition of the Four Points by Sheraton Josun Myeongdong and Gravity Seoul Pangyo, a lifestyle hotel brand under Marriott. The combined transaction value, including ancillary costs, is estimated to be in the low KRW 500 billion range. Josun Hotels, which had been operating both properties under long-term master lease agreements, participated as a direct equity investor in the acquisition fund.
The original owners of the two hotels were funds managed by IGIS Asset Management and Mastern Investment Management, respectively. Although ownership was separate, Josun Hotels had been the master lessee for both properties.
Josun Hotels initially considered acquiring the assets in partnership with the Canada Pension Plan Investment Board (CPPIB). However, differences during negotiations led Josun to seek new partners. Through Daiwa Securities, Josun was introduced to Meritz Securities, which ultimately joined the acquisition consortium. The investment structure includes KRW 2.9 trillion in equity from Meritz Securities and KRW 50 billion from Josun Hotels, with the remaining capital financed through acquisition loans.
Pacific Asset Management will manage the fund. The consortium plans to acquire an additional hotel in another domestic region by the first half of next year, bringing the total number of hotels in the portfolio to three.
Daiwa Securities’ investment banking division is led by industry veterans CEO Lee Young-jin and alternative investment head Lee Dong-yoon. Four Points by Sheraton Josun Myeongdong, opened in 2020, is a 4-star property located near Seoul’s popular Myeongdong shopping district. The hotel consists of 26 above-ground floors and three basement levels, with a total of 375 rooms across a gross floor area of 21,658 square meters. Gravity Seoul Pangyo is situated in the heart of Pangyo’s business district—adjacent to Hyundai Department Store Pangyo—and caters to strong corporate lodging demand, offering 306 rooms.
Industry watchers expect continued growth in hotel transactions, noting rising asset valuations driven by an increase in foreign visitors to Korea.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
