M&G has made a €98m forward funding commitment to a 29,000 sqm (312,000 sq ft) residential development on Bilbao’s sought-after Zorrotzaurre Island on behalf of its European Living Property Fund.
The acquisition marks the fund’s first investment in Southern Europe as it aims to be a part of the urban regeneration project taking place in Bilbao.
The development comprises 314 private rental apartments split across two buildings of 15 and 17 floors. The one-, two- and three-bedroom homes will aim to target an EPC ‘A’ rating and ‘Very Good’ BREEAM certification.
Residents will be able to enjoy river views from their apartments and amenities including communal gardens, a children’s playground, a gym, private storage space and on-site car and bike parking. There will also be 360 sqm (3,875 sq ft) of dedicated retail space. The development will be ready for occupation at the end of 2026.
Formerly an industrial area, Zorrotzaurre Island prides itself on its electric tram network, extensive office, leisure, cultural and academic facilities and an abundance of green spaces.
Designed by award-winning architect Zaha Hadid, it is now a thriving residential community thanks to the regeneration of the peninsula into a new flood-proof island.
“This is the fund’s third deal since launch and sees us diversify into Southern Europe following acquisitions earlier this year in Finland and Ireland. There is strong demand for high-quality living space across Europe and we are building on our commitment to provide homes which have a positive impact on their surrounding communities. We are actively looking at further opportunities across Europe where we can finance similar projects which will deliver best-in-class living space and help to provide resilient returns for our investors.”Marcus Eilers, Head of European Residential, M&G Real Estate
“With strong supply and demand imbalances, low levels of vacancy and one of Europe’s less indebted household markets, the Spanish residential sector offers strong fundamentals for institutional, long-term investors. Research estimates that around two million new homes are needed in Spain, of which around 140,000 are required in the Basque Country. Bilbao leads household growth in the region, with more than 23,000 new households expected to be created in the city in the next 15 years.”Federico Bros, Head of Investment and Asset Management for Iberia, M&G Real Estate
Launched in January this year with circa €600m of investment, M&G’s European Living Property Fund aims to provide institutional investors with attractive risk adjusted returns through investment into Europe’s residential sectors.