South Korea hotel transaction volumes to hit US$1.4b in 2023
Next year is expected to be a subdued one for hotel investments in the country.
In South Korea, a JLL report says investors have their appetites whet, seeking large hotels in Seoul for residential development and contributing to the country’s record-breaking transaction volume – a whopping 85 per cent year-on-year growth. These include Millennium Hilton Seoul, Itaewon Crown Hotel and Novotel Ambassador Doksan.
Here’s more from JLL:
While domestic developers and HNWIs accounted for all hotel transactions between 2020 and 2022, foreign capital too is looking to play a more important role in the near future.
But the pace of transactions is likely to slow for the rest of 2022 and 2023, as increasing development costs, decreasing home prices, and interest rate hikes make redevelopment strategies increasingly less viable. Even as foreign investors continue to hold an interest in South Korea, they are waiting in the wings for further discounts.
Like the luxury brands that line popular shopping boulevard Myeong-dong, the country’s spectacular showing in 2022 caught the eye of many observers. But we predict a subdued capital market for South Korea in 2023, which will record a much lower transaction volume of US$1.4 billion in line with the market’s historic average volume.