A "Josun Palace," the top-tier hotel brand of Shinsegae Group affiliate Josun Hotels & Resorts, is expected to be built on the site of the former Haeundae Grand Hotel in Haeundae, Busan. Josun Hotels & Resorts is in talks to join as the hotel's entrusted operator in the Haeundae mixed-use development project led by major developer MDM Group. If Josun Palace opens in Busan, it will be the second business site after the first location, which opened in 2021 in Gangnam, Seoul.
According to the real estate development industry on the 29th, MDM Plus, a real estate developer under MDM Group, recently signed a memorandum of understanding (MOU) with Josun Hotels & Resorts to operate a Josun Palace on the site of the former Haeundae Grand Hotel in U-dong, Haeundae District, Busan. The two sides are said to be discussing detailed terms to conclude a formal entrusted operation contract.
An industry official said, "MDM Plus and Josun Hotels & Resorts are holding concrete talks on the premise of operating a Josun Palace," adding, "If a formal contract is signed, it could reshape the landscape of the Haeundae hotel market."
Josun Palace is the top-tier hotel brand introduced by Josun Hotels & Resorts. Starting with L'Escape in 2018, Josun Hotels & Resorts rolled out its own brands such as Grand Josun and Gravity, and in 2021 opened the first Josun Palace on the former Renaissance Hotel site in Yeoksam-dong, Gangnam District, Seoul. The Seoul Josun Palace is a five-star luxury hotel located at 231 Teheran-ro in the Centerfield West Tower.
The project site covers 651-2 U-dong, Haeundae District, Busan. It includes the site of the Haeundae Grand Hotel, once one of Busan's signature luxury hotels, and the adjacent Ibis Budget Ambassador Hotel site. MDM Plus plans to build a mixed-use complex up to 49 floors on a 12,594.2-square-meter site in the area. It is a mixed-use development combining a hotel, condo and officetel.
Under the current plan, the site will include 310 hotel rooms, 91 condo units and 352 officetel units. The building area is 8,825.99 square meters, and the total floor area is 224,671.11 square meters. A building-to-land ratio of 70.08% and a maximum floor area ratio of 1,200% will apply. The project received building permits late last year, completing a substantial portion of the administrative procedures for groundbreaking.
MDM Group considered directly operating the hotel and condo and covering part of the project costs through officetel pre-sales. However, it shifted to entrusting the hotel segment to a specialized hotel operator, with Josun Hotels & Resorts emerging as a strong partner. If an entrusted operation contract is signed, Josun Hotels & Resorts will run the hotel and receive a certain fee based on operating performance.
From Shinsegae Group's perspective, Haeundae is considered a strategic base for its hotel business. Josun Hotels & Resorts already operates the Westin Josun Busan and the Grand Josun Busan in the Haeundae area. With the addition of the top-tier Josun Palace brand, it would own three major hotel brands in Haeundae, Busan alone. An industry official said, "Haeundae is a leading domestic tourist destination and a market with steady demand for luxury accommodations," adding, "If Josun Palace opens, Shinsegae Group's Busan hotel portfolio will be further strengthened."
The project site is close to Haeundae Beach, Songnim Park and Dongbaek Island. Nearby are Haeundae LCT The Sharp, Paradise Hotel Busan and Grand Josun Busan. It is a location dense with luxury hotels and residences along Haeundae Beach. The industry expects that, as the former Haeundae Grand Hotel site has seen a long development hiatus, securing Josun Palace would have a considerable impact on the Haeundae tourism and lodging market if it materializes.