Korea's rental developers pair 20-year operating terms with funds that typically last about 10

Foreign money is arriving on a shorter term than the buildings it pays for. Depending on the type of project, long-term private rental housing assumes it will be operated for as long as 20 years, while real estate funds typically run about half that, according to the report on en.sedaily.com ^[10]. A fund that finances a building today is therefore a seller up to 10 years before the operating term ends ^[12].

Someone has to own the building for the second decade. An industry official at a firm that carries the land acquisition, permitting and construction risk said developers who have to keep assets for long stretches after completion end up with capital locked in them that could otherwise fund new development ^[15]. The official's quoted estimate is that "Supply could double or triple if developers were able to sell rental housing to investors willing to hold it long term" ^[16]. On that account, an operator stuck holding a finished building is not starting the next one, and its growth is capped by what it can raise afresh each time. That is one official's number, but the direction follows from the term mismatch.

The per-unit figures are a puzzle, and probably not one to solve from outside. Homes Company's Yongdu-dong project costs 200 billion won in total across 356 units ^[4][3], about 562 million won a unit ^[17], with Hines's half coming to 100 billion won ^[14]. Woozoo's 450 billion won is a fund raised for 3,000 units ^[5], or 150 million won a unit ^[18]. One figure is a project cost and the other is a capital raise, so the gap between 562 and 150 says little about which firm builds more cheaply.

We think the entry side is largely solved and the exit is not. Capital is arriving from CPPIB, Hines and a global firm behind Woozoo, and MGRV reviewed 390,000 square meters of land between January and August ^[1]. The source cites no completed sale of newly built rental stock to a long-term holder, so exit is still a plan.

The counter-thesis is that existing relief is enough and buyers will appear when the buildings are about a decade old; Hines putting 100 billion won into one project suggests at least one investor has priced it that way. Our view would be wrong if a fund sold a completed build-to-rent building to a long-term holder at close to cost with no change in tax or regulation. A discounted or failed sale would support it.