IGIS Asset resumes sale of KIC-backed Shilla Stay Seodaemun

Shilla Stay Seodaemun has been put on the market again amid signs of a recovery in South Korea’s hospitality industry, after earlier attempts to sell the four-star hotel in Seoul fell through.

IGIS Asset Management recently appointed Deloitte Anjin, a Korean unit of Deloitte, as a new sale manager for the property to resume the sale process, according to investment banking sources on Wednesday.

They will send information memoranda on the facility to potential buyers this month and receive preliminary bids by early September.

In late 2023, IGIS Asset sought to divest Shilla Stay Seodaemun through a share deal, under which the buyer would take over the asset via a legal entity created for the property. JLL Korea was appointed for its sale manager.

But it failed to exit the hotel it had acquired at 110 billion won ($81 million) in 2014.

Korea Investment Corp. (KIC) backed the deal for Shilla Stay Seodaemun, one of two assets the sovereign wealth fund invested using its proprietary fund.  

KIC, which manages foreign currency reserves entrusted by the finance ministry and the Bank of Korea, is in principle barred from investing in South Korea.

In the first half of this year, IGIS Asset made a new attempt to sell the property and entered negotiations with Morga Stanley for the divestment, but the US investment bank ultimately backed down.

Shilla Stay Seodaemun, built in 2015, is located in Migeun-dong in the Seodaemun District near Seoul’s central business district.

With a floor area of 13,529 square meters, it has 25 floors above ground and four floors below with 319 rooms, as well as restaurants shared space.

The accommodation is located near Seodaemun Station on the Seoul subway, offering convenient access to Gwanhwamun and Yeouido – key hubs in the city’s central district.

With the rebound in foreign visitors to South Korea, domestic asset managers are renewing their efforts to sell hotels they have owned for more than a decade.

In 2024, the average sale price of hotels in Seoul soared to a record 24.9 million won per 3.3 square meters, according to GenstarMate, a real estate research company.

Meanwhile, other hotels operated under the Shilla Stay brand found new owners earlier this year.

In March, Mirae Asset Management Co. sold Shilla Stay Dongtan in Gyeonggi Province to BlueCove Investment, a Korean real estate investment firm, for around 90 billion won.

Located in Dongtan, about 40 km south of central Seoul, it measures 24,408 square meters with 286 rooms. The hotel is near Samsung Electronics Co.’s headquarters and semiconductor manufacturing complex in Giheung and Hwaseong.

Hana Asset Management Co. sold Shilla Stay Mapo, a three-star business hotel in Seoul, to Shinhan REITS Management for 140 billion won, marking its exit after 12 years.

Write to Gyeong-Jin Min at min@hankyung.com
 

Yeonhee Kim edited this article.