Seoul co-living presents an emerging investment opportunity as housing market transforms: JLL

As South Korea's residential market transitions from traditional rental arrangements to monthly rental models, institutional investors are showing more interest in alternative housing formats — including co-living — in Seoul.

That is according to real estate consultancy JLL, which has published new research indicating that favourable demographic shifts and regulatory reform are backing the investment opportunity for co-living developments in the capital.

About half of South Korea’s population lives in the greater Seoul area as of May this year. And within Seoul itself, single-person households make up about 41% of all households.

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JLL says this comes as one- to two-person households are now predominant in the urban centre, shifting from multigenerational configurations which were previously more prevalent.

Rental housing in Seoul has long operated under the jeonse model, whereby tenants put down a large security deposit — usually a significant portion of the property’s value — and get the full amount back when the lease ends.

However, jeonse contracts in the metropolitan area declined to 38% in 2025, down from 71.9% in 2012. Interest rates have also remained elevated while housing affordability metrics suggest continued pressure.

In response, the government has implemented a new framework for long-term private rental housing to stabilise the rental market and encourage institutional participation.

The programme spans more than 100 units operated over minimum 20-year holding periods. Qualifying properties receive "significant tax incentives", JLL says.

The research team's analysis indicates that the deployment of institutional capital into domestic rental housing and co-living assets has been accelerating since 2024.

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There have been more than 17 significant transactions in the market between 2024 and 2026, mainly involving asset conversions of existing hotels and 'officetels' (compact multi-purpose buildings with both commercial and residential units) into co-living developments. Average transaction values have reached hundreds of billions of won, JLL added.

Notable examples of foreign investments in South Korea's co-living and rental housing:

Recent foreign investments in the co-living and rental housing sectors included platform partnerships and portfolio acquisitions by global investors including KKR, Morgan Stanley and CPPIB. Hines, Invesco and M&G Real Estate have also acquired private rental housing assets. This year, TPG Angelo Gordon acquired assets operated by MGRV, a domestic co-living operator.

JLL Korea chief executive, Lee Tae-ho, sees an increasingly attractive investment environment for institutional capital seeking stable, income-generating residential assets.

In particular, the co-living sector may offer operational efficiencies and differentiated residential experiences.

He describes South Korea’s residential market as "experiencing rapid structural realignment", with the transition from jeonse to monthly rental models and the shift to single-person household configurations.

As of May 2026, median monthly rental rates for co-living units under 40 sq m (431 sq ft) in Seoul stood at about KRW1.13 million ($944). That is about 43% higher than rates of conventional officetel units.

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Despite its premium pricing, co-living is seeing strong demand from younger demographics and foreigners, which JLL attributes to the "differentiated value propositions" such as shared amenity spaces and integrated community programming.