Commercial Real Estate Sees Lodging Assets Surge...Swiss Grand Hotel Sold for 320.8 Billion Won

Lodging Assets Gain Larger Share in Major Deals
Two Out of Three Large December Transactions Were Hotels

Swiss Grand Hotel in Seodaemun-gu was sold for 320.8 billion won last year, marking the largest hotel transaction of the year on an annual basis.

According to Alskquare, a commercial real estate integrated service company, the Swiss Grand Hotel on Yeonhui-ro in Seodaemun-gu, Seoul, was sold for 320.8 billion won in December last year. This was the highest sale price among commercial properties recorded that month, and it also ranked as the most expensive hotel transaction of the year.

Exterior view of Swiss Grand Hotel. Screenshot from the Swiss Grand Hotel website.

Hotel deals were also strong in the commercial real estate market that same month. Two out of the top three commercial real estate transactions by deal size in December were hotel assets. Following the Swiss Grand Hotel, "Factorial Seongsu" in Seongdong-gu and "Hotel U5" in Jung-gu, Seoul, were traded for 254.8 billion won and 145 billion won, respectively, placing them near the top in terms of transaction value.

On an annual basis, the share of lodging assets in large-scale transactions also increased. Last year, the total annual transaction volume of commercial and office real estate in Seoul reached 23.2258 trillion won across 1,856 deals. Among these, there were 33 large-scale sales worth 100 billion won or more, and 7 of them (21.2%) were lodging asset transactions. While the number of large transactions (32 deals) was similar to the previous year, the share of lodging assets (about 9.4%) increased significantly.

Analysts say that investment demand for lodging assets is rising in the commercial real estate market. A representative from Alskquare stated, "It is noteworthy that lodging assets repeatedly appeared in large transactions toward the end of last year," adding, "This can be seen as a sign that investors' criteria for asset selection are changing."

Meanwhile, the largest annual transaction last year was the Seoul International Tower on Teheran-ro in Gangnam-gu, at 897.1 billion won. It was followed by the Heungkuk Life Insurance Building in Jongno-gu at 719.3 billion won and the Daishin Finance Center in Jung-gu at 662 billion won.