Brookfield puts Conrad Seoul on market at over $370 mn

Brookfield Asset Management is seeking to sell off five-star hotel Conrad Seoul at more than 500 billion won ($369.5 million), tapping real estate investment firm Jones Lang LaSalle (JLL) as a financial advisor, banking sources said on Tuesday.

The Canadian alternative asset manager acquired the International Finance Center (IFC) Seoul, comprised of the luxury hotel, three office towers and a shopping mall, at 2.55 trillion won from American Insurance Group (AIG) in 2016. Located in the capital’s financial district Yeouido, the landmark has 506,314 square meters of floor area.

Brookfield put the entire IFC asset on the market in late 2021. In the fierce competition for the deal, Mirae Asset Global Investments Co. was picked as the preferred bidder in May last year, beating a consortium led by IGIS Asset Management-Shinsegae Property at the third bidding round.  

Mirae Asset was set to acquire the whole property for 4.1 trillion won, which was expected to be Korea’s largest real estate deal last year. The Seoul-based investment firm paid a 200 billion won deposit as part of the deal at the time.

But the deal broke down in September last year as the Korean government rejected Mirae Asset’s financing plan, saying the scheme was heavily dependent on borrowing and could hurt investors.

Mirae Asset reclaimed the 200 billion won deposit and took the case to the Singapore International Arbitration Centre for a refund after the deal breakdown. The center hasn’t concluded the case yet.

REASONS FOR DEAL

Brookfield needs to exit from IFC Seoul as its 2.28 trillion won worth of debts mature next year, banking sources said.

The Toronto-based asset manager has decided to sell off the hotel alone as divesting of the entire IFC Seoul wouldn’t be easy due to rate hikes, they added.

Brookfield has sought refinancing for the IFC Seoul since early this year. The firm’s latest refinancing took place in 2019, when it expanded its debt in the property from 1.8 trillion won to 2.28 trillion won with a 3-5% range of rates. The entire asset was valued at 3.37 trillion won at the time.

Brookfield will set up the plan to exit from the office towers and shopping mall of IFC Seoul, while starting the process of selling off Conrad Seoul, market insiders said.

“It is such a large deal in which not many investors can easily participate. We should watch the market as some strategic investors are said to be in talks for a possible acquisition,” a real estate industry source said.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com

Jihyun Kim edited this article.