M&G Real Estate, the global property investment arm of British Prudential, is entering South Korea’s institutional rental housing market — a significant shift from its longstanding focus on office real estate. 

The company plans to deploy capital from its newly launched Asia Living Property Fund, with an initial focus on co-living developments in university-centric neighborhoods of Seoul, tailored to urban residents in their 20s to 40s.

Best known for its large-scale investments in commercial properties, M&G’s move into residential real estate represents a strategic diversification. Industry analysts are watching closely to gauge the potential impact on Korea’s maturing rental housing sector.

As of May 19, sources say M&G has completed internal investment screenings for several sites across Seoul and has begun due diligence for selecting its first co-living development. Among the leading candidates is Sinchon, a vibrant neighborhood west of central Seoul known for its concentration of major universities and its popularity among college students and young professionals.

The firm’s investment concept centers on co-living — a modern rental model that combines private rooms with communal amenities such as shared kitchens, lounges, and social spaces. Co-living has gained widespread traction since the late 2010s, particularly among the MZ generation (Millennials and Gen Z) seeking community-driven yet private living arrangements.

An industry insider commented:

“Korea’s corporate rental housing market is tightly regulated, and the senior housing segment remains small. Co-living offers a flexible, high-demand alternative with fewer entry barriers.”

A recent Samsung Securities report (Commercial Real Estate Series Vol. 3 – Rental Housing) estimates Korea’s co-living addressable market at around 3 million one-person households. In contrast, demand for senior housing is expected to reach just 500,000.

The investment is being carried out via Capston Asset Management, with experienced co-living operators currently under final review to handle operations and tenant services.

M&G Real Estate, which manages over KRW 600 trillion (approximately USD 430 billion) globally — with 10–12% allocated to real estate — could significantly reshape Korea’s rental housing landscape with this entry.

A market expert noted:

“Global players like ICG, KKR, Morgan Stanley, Hines, and CPPIB have already entered the space. M&G’s involvement further strengthens the trend, potentially accelerating the professionalization and globalization of Korea’s rental housing market.”

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