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Wednesday, March 27, 2024

KKR Latest Global Heavyweight to Team with Weave Living as Korea Venture Unveiled

Sachin Doshi, founder and CEO of Weave Living

Weave Living has secured buyout giant KKR as its newest capital partner for the regional apartment operator’s first investments in South Korea, with a focus on Seoul.

The partnership aims to build a rental housing portfolio of 1,200 units with the initial tranche of capital and scale the programme over time as opportunities emerge, the companies said Tuesday in a release ↗.

Manhattan-based KKR will hold a majority stake in the partnership as Weave takes the remaining minority stake and serves as development manager and operating partner. The deal will give Weave a presence in a fourth market after launching projects in Hong Kong, Singapore and Japan.

“Korea has been a cornerstone of our Asia Pacific real estate strategy for a decade, and we are thrilled to make our foray into the urban rental market, which represents an emerging investment segment in Seoul,” said David Cheong, managing director and co-head of acquisitions on KKR’s Asia real estate team. “We are also pleased to establish this venture with Weave, with whom we have developed a trusted and aligned relationship.”

Stealth Pipeline

Weave plans to offer its full range of brands across the Korean portfolio, including Weave Studios, Weave Place, Weave Suites and Weave Residences. The Hong Kong-based operator founded in 2017 by CEO Sachin Doshi has identified “a clear gap in the market for beautifully designed, well-located homes” to serve urban renters and young professionals, primarily in Seoul.

Weave opened its Seoul office last June and has seven team members based there, with plans to double its headcount this year.

David Cheong of KKR’s Asia real estate team

“We have been working on the market thesis and building our pipeline for the Korea opportunity in stealth mode for the last 12 months, and getting the endorsement of such a prolific investor for our Korean rental housing foray is something that I am extremely proud of,” Doshi said in a LinkedIn post ↗.

Weave last month announced an upsized investment ↗ from its existing shareholders — Doshi and private equity major Warburg Pincus — as it looks to double its portfolio in an expansion set to take it beyond Hong Kong, Singapore and Tokyo. The equity injection will support Weave’s expansion to over 5,000 owned and managed units in markets including Tokyo, Osaka, Seoul, Singapore, Hong Kong and other select gateway cities by 2025.

Also in February, Weave formally launched fundraising for its inaugural multi-family fund dedicated to the Japan market. Weave Living Japan Residential Venture I is planned as the first in a series of vehicles targeting the rental housing sector in Asia’s second-largest economy, with an initial target of raising $500 million in equity from global institutional investors.

Weave’s stable of capital partners includes asset management titan BlackRock ↗, LaSalle Investment Management ↗, Angelo Gordon ↗ and PGIM Real Estate ↗.

Seoul Intention

Famed for its leveraged buyouts of large American companies, private equity giant KKR has completed more than 20 real estate transactions in Asia Pacific across commercial, industrial, hotel, office and retail properties.

KKR’s recent Korean investments include last year’s acquisition of the Namsan Green Building ↗, a 57,574 square metre (619,721 square feet) office block in Seoul’s Jung district, from IGIS Asset Management for an undisclosed amount. Investment banking sources put the deal value at KRW 250 billion ($186.7 million), according to the Korea Economic Daily ↗.

The US firm’s earlier deals in the South Korean capital include the KRW 500 billion ($420 million) purchase of the Namsan Square office tower ↗ from the National Pension Service in 2021 and the KRW 639.5 billion ($487 million) acquisition of Shinhan Investment Corporation’s headquarters ↗ in 2022. KKR partnered with IGIS on both deals.

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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