Canada Pension Plan Investment Board (CPP Investments) and MGRV, a leading Korean rental housing provider, are developing rental housing projects in Korea, in a KRW 500 billion (approximately A$554 million) joint venture.
CPP Investments will hold a 95% stake in the venture, while MGRV will own the remaining 5%.
This marks CPP Investments' first direct investment in Korea's residential sector. It focuses on developing properties in key corridors of Seoul, close to major business districts and universities. The joint venture aims to meet the strong demand for high-quality rental housing in the surrounding Seoul area, where half of Korea's population resides.
Sophie van Oosterom, Managing Director, Head of Real Estate at CPP Investments said: “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.”
MGRV CEO Cho Kang-tae said, “this strategic partnership marks a significant step in demonstrating the high growth potential of the Korean rental housing market and MGRV’s competitive operational capabilities on a global scale,” adding, “we will continue to drive ecosystem innovation in the market by expanding community-centered properties.”
CPP Investments is a professional investment management organisation that manages the Fund in the collective interest of over 22 million contributors and beneficiaries of the Canada Pension Plan. The organisation invests globally in public equities, private equities, real estate, infrastructure, and fixed income.
As of 30 September, 2024, the Fund totalled C$675.1 billion (approximately A$748.67 billion). CPP Investments is headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo, and Sydney.
MGRV, a fully integrated residential platform in Korea, sources, develops, and operates "for-rent" housing projects. Through its New Living Community brand, Mangrove, MGRV provides flexible and innovative co-living and accommodation spaces that foster community.
MGRV operates six branches in Korea, with a capacity of 1,200 people, and is expanding its business portfolio targeting new audiences and regions. The company is leading innovation in the residential industry ecosystem, shifting from a supply-driven to customer-focused approach.
This strategic partnership between CPP Investments and MGRV highlights the high growth potential of the Korean rental housing market. It also highlights MGRV's competitive operational capabilities globally.
The joint venture aims to generate attractive long-term returns for the CPP Fund while meeting strong demand for high-quality rental housing in Seoul. Both organisations are committed to driving ecosystem innovation and expanding community-centered properties.