Weave Living-KKR Korea Rental Housing JV Acquires Second Seoul Property

Weave Living and KKR are continuing their push into Korea’s rental residential sector with the acquisition of a second property in Seoul, just two months after the partners’ joint venture purchased its inaugural asset in the Korean capital.

The Hong Kong-based rental housing operator and investor, along with the US private equity giant, have acquired a residential building in Seoul’s Dongdaemun district that will be launched in August as a 98-unit facility under the Weave Place brand, Weave Living founder and chief executive Sachin Doshi announced in a LinkedIn post on Friday.

“Excited to introduce the Weave Place brand offering to Seoul (after successfully launching this urban multi-family product line in Tokyo last year), and with the opening of our flagship Weave Suites – Sunyu Parkside in Seoul’s financial hub of Yeouido scheduled for early next year, I look forward to bringing a new way of renting to Seoul to suit diverse accommodation needs,” said Doshi.

Announced in March to address “a clear gap in the market for beautifully designed, well-located homes” in Seoul with a focus on urban renters and young professionals, the Weave Living-KKR JV will see its portfolio increase to 255 units upon launch of the latest property, with the partners targeting to build a Seoul-centric portfolio of 1,200 rental homes in Korea.

University Town

Weave Living and KKR acquired the UnivM officetel building located at 187-5 Hwigyeong-dong from an unnamed owner without disclosing financial terms of the transaction.

Renamed as the Weave Place Hoegi, the 2,868 square metre (30,876 square foot) property features 98 fully-furnished, one bedroom loft units along with 50 parking spaces, with the building spanning 14 storeys and a basement level.

Located a 6-minute walk from both Hoegi and Hankuk University of Foreign Studies stations on line 1 of Seoul’s subway, the property is situated near a cluster of universities including Hankuk University of Foreign Studies, Kyunghee University, University of Seoul and Kaist Seoul campus, with that area home to over 44,000 student enrolments, as well as a large number of foreign students, language teachers and young professionals, according to Doshi.

The facility’s units, which measure 23.8 square metres (256 square feet) each, are currently being offered at monthly rental rates ranging from KRW 1.39 million to KRW 1.5 million, according to the property’s website.

Weave Buildout

The acquisition follows Weave Living and KKR’s April purchase of the State Sunyu Hotel near Seoul’s Yeouido business district from local hospitality firm Hanseung Investment Development, with that property set to open early next year as a 157-unit Weave Suites facility, which will serve as the company’s flagship property as the venture expands in Korea.

The company opened its Seoul office in mid-2023 and this month brought on board Alex Limb Jie-uk, former head of global investments at Seoul-based private equity firm Capstone Asset Management, as its senior director of Korea investments.

“Weave now has over 250 units in the mix in the city and we are taking steps to shake up the rental housing sector in Korea with many more new developments in the coming weeks and months,” said Doshi.

While Weave Suites primarily caters to professionals by offering hotel-type amenities and premium facilities, the Weave Place brand offers customisable options including furnished, unfurnished and hybrid units ranging from studios to 3-bedroom apartments catering to singles, couples, and families, as well as corporate housing demand.

Weave Living expects Weave Place to be the company’s fastest growing and largest product line by number of units going forward, with a portfolio of 540 units across Tokyo and Seoul by September, including the latest Seoul acquisition.

In addition to the Korean venture with KKR, Weave in February announced an upsized investment from existing shareholders — Doshi and private equity major Warburg Pincus — as it looks to double its portfolio to over 5,000 owned and managed units in markets including Tokyo, Osaka, Singapore, Hong Kong, Seoul and other select gateway cities by 2025.

Also in February, Weave formally launched fundraising for its inaugural multi-family fund dedicated to the Japan market. Weave Living Japan Residential Venture I is planned as the first in a series of vehicles targeting the rental housing sector in Asia’s second-largest economy, with an initial target of raising $500 million in equity from global institutional investors

Weave’s stable of capital partners includes asset management titan BlackRock, LaSalle Investment Management, Angelo Gordon and PGIM Real Estate.

Rental Residential Focus

Manhattan-based KKR, which holds a majority stake in the partnership while Weave retains the remaining share, has added exposure to the rental residential sector within its Korean real estate portfolio this year while selling office and logistics assets.

Last month, a KKR-led consortium which also includes Seoul-based fund manager IGIS Asset Management and developer SK D&D began marketing the Namsan Square office building in Seoul’s central business district after having purchased the property in 2020. The marketing exercise launched a month after KKR sold the Incheon Seoknam Coupang Logistics Centre to IGIS Asset Management.

Other KKR Korean investments in recent years include last year’s acquisition of the Namsan Green office block in Seoul’s Jung district from IGIS Asset Management and the purchase of Shinhan Investment Corporation’s headquarters in 2022.