The 411-unit Songdo CoStay in Incheon (Image: InnoValue)
Tishman Speyer has made its first acquisition under its Korea Living Venture, buying a 411-unit asset in Incheon as the US developer begins deploying Dutch pension capital into the country’s rental housing sector.
The Manhattan-based builder and fund manager announced Sunday that it had closed on Songdo CoStay, a stabilised, nine-storey property at 271 Harmony-ro in Songdo, a university and biotech cluster.
No acquisition price or seller was disclosed, but an October 2024 article in Korea’s Financial News reported that InnoValue Co Ltd, the developer and operator of Songdo CoStay, had engaged JLL to market the asset to potential buyers. InnoValue continues to operate the property, according to Songdo CoStay’s website. The Tishman Speyer venture partnered with Seoul-based Gravity Asset Management on the acquisition, market sources told Mingtiandi.
The purchase comes less than three months after Tishman Speyer reached a first closing of KLV with $300 million in equity commitments from Dutch pension investors APG and Bouwinvest. The vehicle is targeting $400 million in total commitments, which would provide more than $800 million in investment capacity including anticipated financing.
“Songdo CoStay’s location within one of Korea’s most dynamic innovation clusters, established corporate resident base, and strong underlying demand for employee accommodation make it a compelling first acquisition for our Korea Living Venture,” said Graham Mackie, Tishman Speyer’s head of pan-Asia.
Biotech Hub
KLV is focused on acquiring, repositioning and developing living properties throughout the Seoul metropolitan area, primarily targeting existing assets with value-enhancement potential while retaining selective exposure to development projects.
Graham Mackie, Tishman Speyer’s head of pan-Asia (Image: Tishman Speyer)
The vehicle favours residential communities near major transport hubs with convenient access to Seoul and other high-growth districts, as Tishman Speyer seeks to assemble a diversified portfolio of institutional-grade rental housing.
Songdo International Business District is home to roughly 70 biotechnology and life sciences companies employing more than 13,000 professionals, with global and Korean firms establishing large-scale manufacturing and research campuses in the district, according to the announcement.
Songdo CoStay sits at the heart of that cluster near major employers, positioning the furnished residential complex to benefit from demand for employee accommodation as investment and hiring expand across the area’s biopharmaceutical industry. The property’s shared facilities include lounges, kitchens, a fitness centre, laundry rooms and on-site parking.
“We continue to see attractive long-term opportunities in Korea’s living sector, driven by demographic trends, increasing demand for professionally managed homes and limited institutional supply,” said Joelin Ma, senior director on APG Asset Management’s Asia Pacific real estate team. “Songdo stands out for its growing jobs market and established biopharmaceutical sector, which support steady housing demand.”
APG manages €601 billion ($697 billion) in assets on behalf of Dutch pension fund ABP, while €17.8 billion Bouwinvest has built a global residential portfolio for pension clients. The investors’ backing gives Tishman Speyer substantial firepower to scale the strategy beyond its Songdo foothold.
Institutional Opportunities
Newmark Korea research head Judy Jang said KLV’s maiden investment provides further evidence of growing institutional interest in Korea’s rental housing sector.
“Korea’s rental housing market has historically been relatively fragmented and less institutionalised than some other major markets in the region,” Jang told Mingtiandi. “However, structural trends such as the growth of single-person households, rising housing costs, and increasing demand for professionally managed rental accommodation are creating more opportunities for institutional investors.”
Tishman Speyer also pointed to growth in the Seoul region’s foreign resident and international student populations as supporting rental demand and adding to the long-term depth and resilience of the market.
The New York firm has acquired and developed roughly 30,000 rental apartments and for-sale condominiums across four continents since entering the residential sector in 1989, with another 7,400 units in its development pipeline.
Tishman Speyer opened its Seoul office in 2022 after managing South Korea’s National Pension Service real estate investment assets since 2011. The developer has also overseen a $1.5 billion separately managed account targeting US properties for NPS since 2021 and last year established a liaison office near the pension giant’s headquarters in Jeonju.