The sale of the Four Points by Sheraton Myeongdong, one of Seoul’s most closely watched hotel transactions this year, has officially kicked off.

With investor information memorandums (IMs) scheduled to go out this week and final bidding expected in mid-June, the property is widely seen as a bellwether for how the hospitality market is pricing stabilized, income-generating assets under long-term lease contracts. 

Opened in 2020, Four Points Myeongdong is a 375-room, four-star hotel located adjacent to Euljiro 3-ga Station. Its strong connectivity and growing tourist foot traffic have translated into solid operating momentum.

According to Deloitte Anjin, the sale manager, the hotel is projected to record an ADR of KRW 230,000 and a RevPAR of KRW 210,000 in 2025—up roughly 10% year-on-year.

Despite the hotel’s performance, a pricing gap remains. The seller, IGIS Asset Management, is seeking KRW 600 million per room, or about KRW 220 billion total, while many market participants expect the asset to clear in the high KRW 500 million range. The recent sale of Four Points Seoul Station to KB Asset Management at around KRW 500 million per room is serving as an informal pricing reference, even though Myeongdong commands a stronger location and higher revenue potential.

The hotel is currently operated by Chosun Hotel under a long-term master lease running through October 2040, with no break options. This limits operator change flexibility, making the deal less attractive to foreign investors seeking value-up opportunities through rebranding or repositioning. Instead, the investment case is centered around stable dividend yields in the 6–7% range and potential long-term capital appreciation.

Chosun Hotel also holds a right of first refusal, further adding to investor uncertainty. While the group has considered exercising this right in previous deals—such as Gravity Pangyo and Four Points Seoul Station—it ultimately chose not to. Market participants say Chosun remains interested in the Myeongdong asset, but financial capacity may be a constraint.

As of end-2024, Chosun Hotel’s consolidated cash position was just KRW 2.9 billion, while its parent company E-Mart held KRW 1.775 trillion in cash. However, given the nature of E-Mart’s retail operations and capex cycles, this figure is not considered ample for a large hotel acquisition. Chosun’s consolidated operating profit in 2024 was KRW 47.1 billion.

An executive at a global investment firm noted,

“With 15 years left on the lease and limited upside potential, foreign investors are less active. But for domestic institutions focused on stable dividends, it’s a very appealing profile.”

As Korea’s hotel market continues to recover, the Four Points Myeongdong deal will serve as a meaningful signal—not only for pricing, but also for which investor groups are prepared to lead in the post-COVID tourism rebound cycle.

This article was originally published by Corebeat on April 29, 2025.