Korea's Co‑Living Market Booms in 2025

In 2025, South Korea’s co‑living market is experiencing remarkable growth, reshaping the way people live in urban areas. Driven by rising housing costs and a desire for flexible, community‑oriented spaces, this trend is attracting younger generations, entrepreneurs, and digital nomads. Co‑living spaces offer affordable accommodation combined with social connections and modern amenities, making them an ideal choice for many. The boom reflects a shift in lifestyle priorities and a new era of urban living in Korea.

Interest in shared living spaces is rising sharply, drawing attention from both local and international investors. Although South Korea is seeing a growing number of people living alone, new findings from global real estate company JLL reveal that co‑living spaces have evolved beyond a niche option to become an increasingly popular trend in the country’s housing market.

According to the latest data from JLL, these communal housing setups are gaining favor with young professionals, university students, and international students alike. For many in these groups, traditional dormitories and affordable accommodation are hard to secure, making co‑living spaces an attractive solution that balances private rooms with access to shared areas like kitchens, gyms, libraries, and coworking spaces.

Veronica Shim, JLL Korea’s Head of Research, explains that as corporate rental housing grows, more competitors are entering the co‑living sector, and with this trend, investment is gaining momentum. She highlights that major conglomerate affiliates and coworking startups are entering the market, indicating strong prospects for this category of housing.

Data from JLL shows that as of May 2025, units smaller than 40 square meters in Seoul’s co‑living spaces have a median area of roughly 23 square meters. These compact spaces are designed with flexible layouts, allowing residents to balance cost, privacy, and communal interaction.

The higher pricing of co‑living spaces can be seen in the rents being charged, with an average cost of 1.13 million won per month for units under 40 square meters, about 1.5 times more than typical officetel rents. In popular areas such as Gangnam and other southeastern neighborhoods, rents can climb to roughly 1.7 million won each month.

Investment activity in this area has also surged, evidenced by IGIS Asset Management’s launch of a 250‑billion‑won blind fund in collaboration with MGRV back in 2020, sparking more joint ventures between asset firms and co‑living operators. For example, SK D&D has teamed up with LocalStitch to introduce its “Episode Conveni” brand, while global firms like GIC, Hines, and Warburg Pincus have also deepened their interest in the market.

Several notable transactions occurred in 2024, including Morgan Stanley and Gravity Asset Management acquiring an unsold officetel in Gangdong‑gu and converting it into rental housing, now managed by SLP as “Gwell Homes Life Gangdong.” More hotels and officetels that aren’t being fully used are also being adapted into co‑living spaces, indicating a shift in how existing buildings are being revitalized.

According to JLL’s Shim, increased government backing and the expansion of REITs are set to further stimulate the growth of this sector.

With more people living alone and a growing trend of monthly rental payments, demand for long‑term rental accommodation is rising sharply across the country. Shim predicts that an increasing number of unsold officetels will be converted into rental units as more investors join the market.

IGIS Residence REITs currently stands out as the only publicly listed REIT focusing exclusively on residential rental properties. Meanwhile, Koramco Asset Trust is pursuing fresh co‑living ventures, and Union Place is working towards launching its own dedicated REIT for this sector. As public and private efforts intensify to revive long‑term rental housing, institutional investment is poised to grow significantly.

Once considered an unconventional choice, co‑living has now cemented its role within South Korea’s rental housing market, fueled by demographic changes, evolving lifestyles, and strong backing from both local and global investors.

For questions or comments write to contactus@bostonbrandmedia.com

Source: WPJ‍