SK D&D is making a full-scale entry into the senior housing market in partnership with its asset management subsidiary, D&D Investment (hereinafter referred to as DDI), and the global private equity firm Warburg Pincus.
SK D&D, DDI, and Warburg Pincus signed a joint investment agreement for domestic senior housing development on the 14th. The three firms plan to strategically invest in senior housing development and operations in key areas of Seoul and the metropolitan area through this investment agreement, with expectations to secure a maximum of 1 trillion won in assets under management (AUM).
Warburg Pincus is a top 10 U.S.-based global private equity firm. This investment marks the third investment Warburg Pincus has conducted in Korea through the Warburg Pincus Asia Real Estate Fund. Previously, the firm invested in Wide Creek Asset Management and New Growth Real Estate, and in logistics warehouses through its joint venture MQ Logistics.
Based on this agreement, SK D&D will actively enter the senior housing development sector, which is rapidly growing due to an aging population. The senior sector is a market with increasing demand as society enters an ultra-aging phase, but the residential business is still in its early stages. Utilizing its experience in developing various products and its know-how in operating rental housing, SK D&D plans to proactively enter the senior market and quickly expand its business.
Under the joint investment agreement, each company is prioritizing investments in a total of three projects. The first project is a senior residence located in Bangbae-dong, a core residential area in Gangnam, Seoul. This high-end senior housing product, with a total floor area of about 10,000 square meters (approximately 3,300 pyeong) and 12 floors, is aimed to begin construction in early 2026, with completion targeted for 2028. In addition, each company is reviewing two more projects, which are planned to be developed as infrastructure-oriented products adjacent to hospitals and convenience facilities.
Kim Do-hyun, CEO of SK D&D, said, "We will develop differentiated and high-quality senior housing products by combining SK D&D's domestic real estate development and housing brand operational capabilities with Warburg Pincus's platform building experience and operational expertise in the housing institutional sector." He added, "Starting with this project, we plan to actively participate in public offerings and mixed-use development projects to diversify our senior housing business portfolio."
Takashi Murata, co-representative of Warburg Pincus Asia Real Estate and representative of Japan, noted, "As Korea officially enters an ultra-aging society in 2024, with those aged 65 and older accounting for 20% of the total population, there is a significant shortfall in both quantity and quality of senior dwellings." He continued, "The government has been actively promoting various support policies to revitalize the senior housing market in recent years," adding, "I am confident that these changes will provide immense opportunities in Korea's senior housing market."