Canada Pension Plan Investment Board (CPP Investments) has entered the Korean rental housing market through a 95 per cent stake in a new venture targeting co-living and tenants looking for an in-house community. Teaming with domestically based, MGRV, the joint partners plan to develop projects in Seoul’s key business and university districts.
CPP Investments has committed up to CAD $133 million toward initial seed projects with expectations the joint venture will eventually invest CAD $500 million. MGRV develops and operates purpose-built rental housing targeting the co-living market, through its Mangrove brand. The new influx of capital will expand those holdings from the current six projects, accommodating approximately 1,200 residents.
“We are pleased to work alongside an experienced local partner like MGRV to enter this market segment, which we believe can generate attractive long-term returns for the CPP Fund,” says Sophie van Oosterom, managing director and head of real estate with CPP Investments.
“This strategic partnership marks a significant step in demonstrating the high growth potential of the Korean rental housing market,” says Cho Kang-tae, MGRV’s chief executive officer. “We will continue to drive the ecosystem innovation in the market by expanding community-centered properties.”