Hanwha Galleria purchased two prime Seoul properties totaling 450.2 billion won within two weeks, with a 236.7 billion won land acquisition in Sinsa-dong, Gangnam-gu on July 14 and a 213.5 billion won Sunhwa Building purchase in Jung-gu on May 30. The company's board stated the purpose as securing real estate development sites and improving profitability through development projects. This accelerated real estate strategy aligns with the launch of a new holding company structure next month, where Hanwha Galleria will operate under the 'Life Solution' division alongside Hanwha Hotel & Resort and Ourhome, with Vice President Kim Dong-sun leading retail, hotel, and F&B operations.
Hanwha Galleria Acquires 2,749.5㎡ Sinsa-dong Land for 236.7 Billion Won
According to the Financial Supervisory Service's electronic disclosure system on July 18, Hanwha Galleria signed a contract on July 14 to purchase 2,749.5 square meters (approximately 832 pyeong) of land in Sinsa-dong, Gangnam-gu for 236.7 billion won. The board disclosed the acquisition purpose as securing a real estate development site and stated the expected effect as improving profitability through real estate development projects. The site near Dosan Park has already received approval for new apartment construction. The company plans to establish a project finance vehicle (PFV) or special purpose entity to develop a premium residential complex. The Sinsa-dong and Cheongdam-dong area attracts high-end residential demand in connection with Apgujeong reconstruction projects.
Company Purchases Sunhwa Building for 213.5 Billion Won as Office Headquarters
On May 30, Hanwha Galleria acquired the Sunhwa Building and its land in Jung-gu for 213.5 billion won. The primary purpose of this acquisition is securing office space. The company plans to restructure the rental arrangement to secure revenue and increase mid-to-long-term asset value. The strategy involves using the property as corporate headquarters while generating rental income.
Four-Year Investment in Seoul Prime Locations Reaches 650 Billion Won
The company's real estate acquisitions have continued for several years. In April 2023, Hanwha Galleria purchased land and buildings in Sinsa-dong from Green Snake Company for 89.5 billion won. In December of the same year, the company acquired land and buildings in Cheongdam-dong for 22.5 billion won. In April of last year, the company purchased land and buildings in Seogyo-dong, Mapo-gu for 87.5 billion won. Including the two recent acquisitions, the total funds invested in prime Seoul locations over four years amount to approximately 650 billion won.
Apgujeong Luxury Store Redevelopment Planned from 2027 to 2033
The pinnacle of the company's real estate development is the reconstruction of the Apgujeong luxury store. Hanwha Galleria will invest approximately 900 billion won from 2027 to 2033 to rebuild the luxury store.
![Apgujeong Galleria Department Store New Construction Rendering]()
Apgujeong Galleria Department Store New Construction Rendering [Source: Hanwha Galleria]
Hanwha Galleria Joins Life Solution Division Under New Holding Company
Industry observers assess that Hanwha Galleria's moves are connected to the group's restructuring. Hanwha Group passed a spin-off proposal at an extraordinary shareholders' meeting on July 15. Under the new holding company launching on August 1, Hanwha Galleria will be grouped with Hanwha Hotel & Resort and Ourhome in the 'Life Solution' division. Hanwha Galleria includes 'real estate development, sale, purchase, lease, operation and management business' in its articles of incorporation and classifies this as an operating business. Industry analysts view this as a strategy to preempt space for retail, hotel, and F&B businesses while developing real estate as a new revenue source.
External Borrowing Expected to Exceed 400 Billion Won for Acquisitions
The successive real estate purchases create temporary borrowing burdens. According to Nice Credit Rating, while the company's own cash was partially used for real estate acquisitions, most funding is expected through external borrowing. The increase in borrowing burden is expected to exceed 400 billion won.
Company Confirms Contract Finalization Planned for Second Half of Year
A Hanwha Galleria official stated, "The two assets currently being acquired are expected to increase in future value due to their locational scarcity and high utilization," adding, "We plan to finalize contracts for both assets during the second half of the year."
FAQ
What did Hanwha Galleria purchase in Seoul within two weeks?
Hanwha Galleria purchased two properties totaling 450.2 billion won: 2,749.5 square meters of land in Sinsa-dong, Gangnam-gu for 236.7 billion won on July 14, and the Sunhwa Building in Jung-gu for 213.5 billion won on May 30. The board stated the purpose as securing real estate development sites and improving profitability through development projects.
How much has Hanwha Galleria invested in Seoul real estate over four years?
Including the two recent acquisitions, Hanwha Galleria has invested approximately 650 billion won in prime Seoul locations over four years. Previous purchases include Sinsa-dong properties for 89.5 billion won in April 2023, Cheongdam-dong properties for 22.5 billion won in December 2023, and Seogyo-dong properties for 87.5 billion won in April of last year.
What is the financing structure for Hanwha Galleria's recent real estate acquisitions?
According to Nice Credit Rating, while the company's own cash was partially used, most funding is expected through external borrowing. The increase in borrowing burden is expected to exceed 400 billion won. A company official confirmed plans to finalize contracts for both assets during the second half of the year.
