Goldman Sachs has committed approximately USD 70 million (KRW 100 billion) in equity investment to acquire the Mercure Ambassador Seoul Hongdae, marking the firm’s first real estate transaction since establishing its Korea-dedicated team in 2022.

The investment was made via a common equity position in a fund managed by JB Asset Management, the preferred bidder selected for the acquisition of the property.

JB Asset Management won the bidding process in October 2024, following a sale organized by Hyundai Asset Management. The auction drew five domestic asset managers partnered with foreign capital, including LB Asset Management, Midas Asset Management, and Wide Creek Asset Management.

Goldman Sachs’ contribution represents roughly 40% of the total proposed acquisition price of KRW 270 billion (approx. USD 189 million), positioning the firm to lead the capital structure for the deal closing.

The hotel is currently operated by Seohan Tourism Development under a master lease agreement, which expires in 2029. However, JB Asset Management is working in strategic partnership with Japan-based hotel operator Sotetsu Group, a subsidiary of the Sotetsu railway company. Sotetsu is reportedly considering a KRW 50 billion preferred equity stake and is expected to assume operational control of the hotel in the future.

If Sotetsu’s investment does not materialize, Goldman Sachs is said to be evaluating alternative hotel operators to step into the role.

The transaction is Goldman Sachs’ first real estate investment in Korea since forming its dedicated team in 2022. The firm recruited Min Choi, formerly of M&G Real Estate Korea, and Seung-Mo Ryu from M&G Singapore, to spearhead its renewed focus on the Korean market.

The firm cited rising international arrivals and the strategic location of the property as core investment drivers. Hongdae is one of Seoul’s most popular tourist destinations, particularly among younger international travelers, and has seen a strong post-COVID recovery in hotel demand.

• Location: 144 Yanghwa-ro, Mapo-gu, Seoul
• Total floor area: 17,058.52 square meters
• Floors: B6–F18 (reception on 1F; guest rooms from F5 to F19)
• Room count: 270 rooms
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The lower levels (basement through F4) are leased to a variety of retail tenants, including fashion platform Musinsa and SK Telecom, providing a stable rental income stream. The hotel is within walking distance of Hongik University Station, a high-traffic location favored by foreign tourists.

Room rates have risen significantly with tourism recovery. The average daily rate (ADR) reached approximately KRW 300,000 in 2024, driven by increased inbound demand.

The property was previously reviewed by a range of investors including KB Asset Management, Smilegate Asset Management, and Blackstone in 2023. However, no transaction was finalized at that time.

Goldman Sachs’ entry into this deal signals renewed institutional confidence in the Korean hospitality sector, particularly in tourism-driven submarkets with upside potential.

This article was originally published by Corebeat on March 24, 2025.