Co-living assets are gaining popularity in Seoul, South Korea, with the segment anticipated to become a “more entrenched residential trend” in the East Asian metropolis, according to research by JLL.
This comes amid expansion in Seoul’s corporate rental housing market, supported by growing competition and rising investor interest. Within this landscape, more co-living providers have emerged over the past decade, including subsidiaries of South Korean conglomerates and units of co-working-based start-ups, says Veronica Shim, JLL Korea’s head of research.
Foreign co-living operators are also venturing into the Korean co-living space. For example, in 2023, Singapore co-living operator Cove partnered with South Korea’s Honors Asset Management to enter the market under the brand Cove Korea. Hong Kong-based Weave Living has also joined the fray, opening two properties in Seoul last year.
Seoul co-living properties typically feature rooms that measure about 40 sq m or less, based on JLL’s research. Tenants have access to common spaces such as kitchens, co-working areas, gyms and libraries. The units are targeted towards young, single-person households, including university and international students, with the communal areas often marketed as spaces that facilitate community and connection.
The properties tend to operate on a tiered pricing system, with tenants having the option to choose the extent of shared space they prefer. The cheapest units come with just a bed and desk, requiring the tenant to use shared bathroom facilities and kitchens, while pricier options feature private bathrooms and kitchens.
Given its range of shared amenities, co-living properties generally command higher rents than “officetels”, a similar class of Korean rental housing. A blend of “office” and “hotel”, officetels are compact, quasi-housing units that accommodate both residential and office use. Designed for office workers, they are usually located in prime locations and come with furnishings.
As of May, the median monthly rent for Seoul co-living units under 40 sq m stood at KRW1.13 million ($1,055), about 1.5 times more than for officetels, JLL research shows. Median co-living rents are highest in Seoul’s South-East area, which includes the three popular Gangnam districts of Gangnam-gu, Seocho-gu and Songpa-gu, at KRW1.7 million monthly.
Foreign investor interest
While domestic companies paved the path for Korea’s co-living segment, in recent years, increased foreign capital inflows into the local housing market have spurred further activity. In 2018, Singapore’s GIC invested in Episode, a co-living brand by South Korean developer SK D&D Co.
Since then, other foreign institutional investors have entered the co-living space. These include UK-headquartered ICG, which launched a KRW300 billion domestic co-living fund with local co-living operator Homes Company in 2023; and the Canada Pension Plan Investment Board (CPPIB), which formed a KRW500 billion joint venture with local operator MGRV in 2024.
Several other co-living deals took place last year. KKR and Weave Living teamed up to acquire two assets that have been rebranded as Weave properties, while US-based Hines acquired a co-living asset in Sinchon. Morgan Stanley partnered with Gravity Asset Management to acquire a Seoul building that was remodelled into rental housing.
Foreign investment in domestic co-living market
Source: JLL
Strong fundamentals
JLL’s Shim highlights that high housing prices in Seoul have resulted in growing demand for rental housing, particularly for single-person households. At the same time, supply remains limited, boding for a positive outlook for the rental housing market.
Another factor contributing to Seoul’s growing rental housing market is a change in rental contract structures. In South Korea, the jeonse model, which was popularised in the 1970s, requires tenants to pay a lump-sum deposit equivalent to 50% to 80% of the unit’s market value instead of monthly rent. The deposit is fully refunded at the end of the rental tenure, which is usually two years.
However, the model has seen a decline in the last decade in favour of a conventional rental agreement with monthly payments, as a sluggish South Korean economy and increasing interest rates placed pressure on housing prices. Since 2018, cases of landlords failing to refund the jeonse deposit to tenants have surged, raising concerns about the viability of the jeonse model.
According to JLL, the proportion of jeonse contracts in Greater Seoul has been in decline, going from 63% in 2014 to 46% in 2024. On the other hand, monthly rent agreements have grown and accounted for 54% of contracts in 2024. JLL’s Shim believes that the shift to monthly rental agreements will further boost demand from rental housing, as it opens the doors for a wider pool of prospective tenants.
Given the strong market fundamentals, Shim is confident in the co-living segment’s expansion in Seoul and beyond. “With the growth of the corporate rental housing market, competition among co-living operators will only intensify, as will concurrent investor interest,” she adds.
