This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:53 p.m. on Aug. 26, 2026.
Global private equity fund (PEF) manager KKR is pushing to sell a Seoul rental housing portfolio. It initially sought to sell three assets in a single package, but bids reportedly clustered around only some assets. As the conversion of jeonse to monthly rent and the rise in single-person households highlight the growth potential of Korea's rental housing market, some analysts say real estate regulations and the resulting tax burden are weighing on investors. Among the three assets KKR is selling, the Gangnam property with a heavy comprehensive real estate tax burden reportedly drew limited investor interest.
According to the investment banking (IB) industry on the 26th, KKR recently conducted bidding for three rental housing assets it owns in Yeongdeungpo, Dongdaemun, and Gangnam in Seoul. Hong Kong-based Weave Living is said to be handling the sale. Weave Living is partnering with KKR to operate the assets.
The assets for sale total 376 units, including "Weave Suites Seonyu Parkside," "Weave Place Hoegi," and "Weave Place Gangnam Station." KKR initially tried to bundle the three assets into a single portfolio and sell them at once. However, it is understood that only buyers seeking to selectively acquire individual assets, rather than the entire portfolio, appeared in the bidding.
Two domestic managers teamed with foreign capital are said to have participated in the bidding. One is pursuing the acquisition of "Weave Place Hoegi," while another manager reportedly expressed interest in acquiring only two assets, including "Weave Suites Seonyu Parkside" and Hoegi.
By contrast, no one bid for the Gangnam Station asset due to the tax burden, including the comprehensive real estate tax.
The Gangnam Station asset is considered highly attractive from a location standpoint alone. However, factoring in holding-stage taxes such as the comprehensive real estate tax, it is reportedly difficult to meet the return investors seek. Even if rents are raised to improve profitability, the tax burden can grow alongside, potentially limiting profitability from asset value appreciation or increased rental income.
Even so, the growth potential of the domestic rental housing market itself is still rated as high. According to JLL Korea, as global institutional investors began in earnest to invest in domestic rental housing and co-living from 2024, at least 17 major transactions closed between 2024 and 2026. In particular, deals to acquire existing hotels or officetels and convert them into rental housing such as co-living dominated.
Rising monthly rents are also drawing investor interest. As of May, the median monthly rent for co-living units of 40 square meters or less in Seoul was about 1.13 million won, roughly 1.4 times higher than the 790,000 won for standard officetels. Analysts say the rental market's rapid shift from jeonse to monthly rent and the increase in single-person households are boosting the investment appeal of residential assets that can secure stable rental cash flows.
Foreign capital is also continuing to invest in domestic rental housing. KKR teamed up with Weave Living to build a Seoul rental housing portfolio, while Morgan Stanley is working with domestic operators on rental housing development and operations. U.K.-based ICG invested in a co-living business with Homes Company, and the Canada Pension Plan Investment Board (CPPIB) established a joint venture (JV) with domestic rental housing developer MGRV to pursue rental housing development.
An industry official said, "Overseas investors are showing considerable interest in the long-term growth potential of the domestic rental housing market itself," adding, "However, at the actual investment stage, they must weigh not only rents but also taxes and acquisition prices, so the mood is to decide whether to invest by calculating after-tax returns and future upside for each asset."
KKR likewise is expected to revise its strategy in this bidding to a selective sale that finds buyers for each asset rather than selling the entire portfolio at once.