M&G Real Estate, the global property investment arm of British Prudential, is expanding its footprint in South Korea by entering the institutional rental housing market — a new sector for the firm, which has long been a major investor in Korea’s office and logistics sectors.

The firm will deploy capital from its newly launched Asia Living Property Fund, with an initial focus on the co-living sector in vibrant, university-dense neighborhoods like Sinchon. These projects target urban residents in their 20s to 40s, reflecting changing housing preferences in Seoul.

As of May 19, sources indicate that M&G has completed internal investment screenings for multiple sites and is now in due diligence for its first development. Sinchon, known for its cluster of major universities and strong appeal to young professionals, is among the top candidates.

This pivot into residential is seen as a strategic diversification. M&G, best known in Korea for its landmark office deal Centropolis, is now looking to capture demand from Seoul’s growing base of one-person households.

The co-living model — offering private rooms with shared kitchens, lounges, and other communal amenities — has grown globally since the late 2010s. In Korea, it is gaining momentum among Millennials and Gen Z, who seek affordable, socially engaging, and flexible housing solutions.

An industry insider noted, “Korea’s corporate rental market is highly regulated, and senior housing remains niche. Co-living fills a clear gap — high in demand, low in regulatory friction.”

Samsung Securities estimates the potential market size for co-living in Korea at around 3 million one-person households. In contrast, senior housing demand is projected at just 500,000.

M&G’s local partner for execution is Capston Asset Management, while experienced co-living operators are currently undergoing final selection for operations and tenant engagement.

Globally, M&G Real Estate manages over KRW 600 trillion (approximately USD 430 billion), with 10–12% allocated to real estate. Its entry into Korean living sectors follows moves by global peers like ICG, KKR, Morgan Stanley, Hines, and CPPIB.

A market expert commented, “The addition of a seasoned global investor like M&G further validates the growth trajectory of Korea’s rental housing market and may accelerate its evolution toward a more professional, global standard.”

This article was originally published by Corebeat on May 19, 2025.