Singapore-based real estate investment trust ARA Asset Management plans to acquire the 434-room Conrad Seoul from Toronto-based firm Brookfield Asset Management for 400 billion South Korean won ($292 million), or approximately $670,000 per key, according to Korean business publication Maeil.
It is the largest hotel deal in South Korea so far in 2024.
Mingtiandi, another Asian business media outlet, reported last October that Brookfield initially placed the asset on the market with a guide price of “over $370 million.”
The month before, Korean newspaper Korea JoonAng Daily said the selling price was far higher than that. It said the guide price was 1 trillion won, or $750 million.
Korea JoonAng Daily reported at the time Brookfield bought the hotel and the International Financial Center Seoul for 2.55 trillion won. The IFC Seoul, which contains a shopping center and three office towers, is not part of the latest deal.
The 38-floor hotel was opened in November 2012.
Seoul-based Mirae Asset Global Investments was due to buy the hotel and IFC in 2022, but that deal fell through when South Korean financial authorities ordered Mirae to “reduce the level of debt proposed for financing the acquisition,” according to Mingtiandi.
The deal is the second largest Singaporean acquisition in the last 30 calendar days. In mid-May, Copthorne Hotel Holdings, a division of City Developments Ltd., bought the 268-room Hilton Paris Opéra for €240 million ($259 million), or €895,522 per room.
Jesper Palmqvist, senior director, Asia-Pacific, at STR, CoStar’s hotel analytics division, said he found it interesting that the hotel was initially listed at $370 million and that the deal failed with Mirae.
He added there was some movement in transaction volumes in Seoul, but that movement is not huge.
“It is hard to say how indicative [this deal] is, apart from fact that the market pays what the market wants to pay. [There] hasn’t exactly been tons of deals there recently,” he said.