[Edaily Marketin KIM SUNG-SOO Reporter] Foreign capital is accelerating its entry into the Seoul hotel market. As tourism demand, which had stagnated following the COVID-19 pandemic, recovers, there has been a series of investment cases where investors are acquiring hotels in downtown Seoul and increasing their asset value through rebranding and room expansions.

In particular, with major deals being finalized in areas highly accessible to foreign tourists—such as Myeongdong and Yeongdeungpo—Seoul’s hotels are re-emerging as a key investment destination for global investors.

'Voco Seoul Myeongdong' Sold for 368.6 Billion Won… Largest Hotel Deal of the Second Quarter

According to the commercial real estate industry on the 15th, the acquisition of “Voco Seoul Myeongdong” by Singapore-based CapitaLand Investment Management stands out as the most notable transaction in the hotel market

during the second quarter

of this year.

Capitaland Investment Management acquired ‘Boko Seoul Myeongdong’ from Gravity Asset Management and TPG Angelo Gordon for approximately 368.6 billion won. This transaction was the largest in the hotel market during the second quarter of this year, with the purchase price per room reaching approximately 640 million won.

Boco Seoul Myeongdong is a 4-star premium hotel located at 52 Toegye-ro, Jung-gu, Seoul. It operates under the “Boco” brand, part of the UK-based IHG (InterContinental Hotels Group), and features 21 floors above ground with a total of 576 rooms, including 30 suites.

Originally, this hotel was the “T-Mark Grand Hotel Myeongdong,” operated by Hana Tour. After Gravity Asset Management acquired the property, it was rebranded as “Boco,” IHG’s premium brand, and reopened in November 2024.

In other words, the transaction was structured such that Gravity Asset Management changed the hotel’s brand, enhanced the asset’s competitiveness, and then sold it to a foreign investor. It is believed that the combination of its prime location in Myeongdong—a major tourist hub—and the benefits of rebranding attracted the interest of global investors.

Foreign capital has also been invested in hotels in Yeongdeungpo. Orion Asset Management, having secured Goldman Sachs as an investor, purchased the “Yeongdeungpo Union Hotel,” located at 136 Yangpyeong-ro in Yeongdeungpo-gu, Seoul, for 53 billion won last May.

The Yeongdeungpo Union Hotel is situated directly in front of Seonyudo Station on Subway Line 9. Following the acquisition, plans are reportedly underway to expand the number of guest rooms from the current 96 to 151 and to introduce the global hotel brand Hilton.

Strategic Evolution from “Buy-and-Hold Investment” to “Buy-and-Grow Investment”

The recovery in tourism demand is driving foreign capital to set its sights on Seoul’s hotels.

According to the Ministry of Culture, Sports and Tourism, the total number of foreign tourists visiting Korea this year surpassed 10 million (preliminary figure) as of the third week of June. This marks an advance of about one month compared to last year, when the 10-million mark was reached in mid-July.

Furthermore, the cumulative number of foreign tourists visiting Korea from January through May this year totaled 8.72 million, a 21.0% increase compared to the same period last year (7.21 million).

Analysts attribute this growth in foreign tourists to the continued global popularity of K-culture, combined with proactive efforts by both the government and the private sector to attract visitors, despite ongoing external uncertainties such as political instability in the Middle East.

By country, Chinese tourists accounted for the largest share at 2.56 million. They were followed by 1.6 million Japanese tourists and approximately 930,000 tourists from Taiwan. In particular, the number of tourists from Taiwan rose by 33% compared to the same period last year, recording the highest growth rate among major source markets for South Korea.

As the number of tourists rises, demand for hotel rooms in downtown Seoul is also recovering. Hotels in areas with excellent subway access and proximity to tourist and commercial facilities—such as Myeongdong and Yeongdeungpo—are likely to benefit directly from the increase in foreign tourists.

In particular, foreign investors are not merely buying and selling hotels; they are implementing strategies to enhance asset value by changing brands and increasing the number of rooms. This reflects their approach of viewing hotels as “operational real estate assets” and actively improving their market appeal.

Industry experts believe this trend will influence the Seoul hotel investment market. If tourism demand remains stable, not only will hotel operating profits improve, but there will also be greater potential for asset value appreciation through rebranding and room expansions.

A real estate industry official stated, “Recently, foreign capital investment in the Seoul hotel market has seen a strategic shift from ‘buy-and-hold’ to ‘buy-and-grow,’” adding, “Competition among global investors for hotel assets is expected to intensify, particularly in Seoul’s prime locations where tourism demand is concentrated.”