SOUTH KOREA Trends and Developments Contributed by: Junghwan Lee, Dong Seok Woo, Jun Woo Cho and Jee In Kim, Lee & Ko
from broader regional diversification, particularly in locations where power access is more attainable and policy-driven financial support is available through vehicles such as the Regional Revitalisation Fund and the Industrial Complex Environment Improvement Fund. Against this backdrop, and following transac - tions such as Macquarie Infrastructure Fund’s acquisi - tion of Aegis Hanam IDC in August 2024 at a cap rate in the low-to-mid 5% range, data centres are increas - ingly viewed as a stable alternative real estate asset class in Korea. Hospitality In 2025, South Korea’s hotel market grew rapidly, driven by record inbound tourism, with approximate - ly 18.7 million foreign visitors supporting transaction activity of around KRW2 trillion across 3,138 rooms, mainly in the Greater Seoul Area. Operationally, the market also experienced a discernible shift away from master lease arrangements toward hotel management agreements, as investors sought to participate more directly in rising average daily rates and to hedge inflation through operating exposure. In 2025, amid improving market fundamentals, the entry of domestic and international institutional investors targeting prime assets became increasingly prominent, as evidenced by Goldman Sachs’ acquisition of Mercure Ambas - sador Seoul Hongdae and its entry into the Korean market.
Looking ahead to 2026, the imbalance between sup - ply and demand is expected to become more pro - nounced, as tourism demand continues to expand against a limited pipeline of new hotel supply. Trans - action activity is likely to remain strong, particularly in the 3- to 4-star segment, and prime hospitality assets held by conglomerates may continue to be brought to market as part of the broader monetisation trend.
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