In Seoul, investors at Dongsan have recently taken notice of a rise in hotel values. Researcher Choi Yong-hyun’s study, which he presented to the press, revealed that various types of hotels from four‑star to five‑star in Seoul are experiencing higher average transaction prices.
Choi noted that “the Seoul hotel market has been seeing its capital return rates decline while the price per guest room has steadily risen.” He added that this trend is reflected in the expectations for returns among Dongsan investors. He specifically pointed out that the average transaction price of four‑star hotels in 2023 was about 3 billion KRW, now roughly 7 billion KRW—almost double what it had been.
He also said that “five‑star hotels, which were previously trading at around 1 billion KRW or less, are now exceeding 1.2 billion KRW.” He cited the average transaction price of Seoul hotels in Q4 last year as 306,500 KRW—38% higher than the same period the previous year. Choi added that “the capital return rate is roughly 5% per annum, which is relatively low,” and suggested that part of the rise may be attributable to market interest‑rate changes.
When asked why the increase in hotel values has not yet been reflected by listed hotel stocks, Choi said: “If we calculate an estimate based on current transaction prices and capital return rates, a significant portion of a hotel’s total value can be explained.” He offered predictions for how this trend might eventually appear in the stock market.
Representative listed hotel‑stock cases include Seobu T&D, GS P&L, and JIGESK Corporation. Seobu T&D owns 1,700 rooms across four‑ and five‑star hotels in Yongsan; GS P&L operates Grand Parna 550 rooms and Wensit Parna 564 rooms in Samsung-dong; and JIGESK owns a five‑star Grand Hayet with 616 rooms.
The fact that major listed hotel companies’ values are not yet fully reflected in the market offers investors new insights, urging a re‑evaluation of the Dongsan market’s direction and opportunities. Continued scrutiny of future transaction data and changes in capital return rates is strongly warranted.