Blackstone Acquires SM Group Gangnam Building... Planned Conversion into Hotel

The world's largest private equity firm Blackstone has acquired the SM Group Gangnam building located in Gangnam-gu, Seoul. On the 1st, Blackstone announced that it has partnered with Travelodge Asia, an integrated hotel investment and management company focused on select service hotels across Asia, and plans to transform the SM Group Gangnam building into a select service hotel.

Kim Tae-rae, Head of Blackstone Korea Real Estate, said, "We are very pleased to continue investing in Korea by enhancing the value of well-located assets, which is Blackstone's strongest area," adding, "As Korea's culture and medical services generate global demand, Blackstone views travel and leisure as one of the most promising investment themes, and in cooperation with Travelodge, we will introduce a new select service hotel in one of Seoul's busiest areas."

Marcus Aw, Managing Director of Travelodge Asia, said, "We are very pleased to carry out this fifth acquisition in Seoul through our partnership with Blackstone," adding, "We have actively acquired assets that can be reborn as mid-scale hotels centered on Korea, Japan, Singapore, and Hong Kong to increase added value. Especially since Korea is a very popular destination for leisure and business travelers worldwide, we have high expectations for operating hotels together with Blackstone."

Blackstone is one of the largest investors in the global hotel industry, with a track record of transforming hospitality brands into centers of F&B and entertainment in various regions worldwide, including Hilton Hotels and Cosmopolitan in the U.S. and Crown Resorts in Australia.

The building is located at the heart of Gangnam's major business and commercial district, within walking distance of four subway stations, luxury residential complexes, hotels, retail, and medical facilities. Seoul's hospitality market has shown explosive growth fueled by an increase in foreign tourists after COVID-19. In the first half of this year, the number of foreign tourists reached 7.7 million, a 74% increase compared to the same period last year.

This acquisition is Blackstone's third real estate transaction in Korea this year. Last month, Blackstone acquired a large logistics asset located in Gimpo. In April, it completed the sale of Arc Place, a prime office building located in Gangnam. This sale is regarded as the largest commercial real estate transaction in Seoul's major business districts since 2022 and is seen as the result of years of focused asset management efforts to transform Arc Place into a leading office building.