M&G Real Estate expands its residential capability and European property fund range with the launch of the M&G European Living Property Fund (The Fund), building on its market-leading £1.3bn/€1.5bn UK Living strategy (as of 30 September 2022).
The Fund aims to provide institutional investors with attractive risk adjusted returns through investment into Europe’s residential sectors – including Build to Rent, single-family rentals, student housing and retirement living.
The Fund has launched with €400m of investment from long standing client, MN – one of the largest pension administrators and asset managers of Dutch pension funds – which is diversifying and internationalising its residential exposure, and €178m from an M&G internal client fund which is upweighting to alternatives in Europe. Commenting on MN’s investment in the M&G European Living Property Fund, M&G Real Estate’s Portfolio Manager highlights its aim to secure long-term returns for its clients.
“By increasing exposure to residential real estate in Europe, we aim to secure long-term returns for our clients PMT and PME. The focus on sustainability and the fund manager’s long track record played an important part in placing this newly committed capital.”Joep Barten, Portfolio Manager, Real Estate, M&G Real Estate
The Fund will be led by M&G Real Estate’s Head of European Residential, Marcus Eilers. He will lead the expansion into the European Living sector from the company’s Frankfurt office, as part of M&G’s wider residential platform led by Alex Greaves, Head of UK and European Living.
Marcus will work alongside M&G’s highly experienced European team to secure opportunities with selected developers and property owners sharing M&G’s vision to provide high quality, sustainable homes that support wellbeing, sustainability and community.
“This is a natural progression of our successful UK Living strategy. We look forward to combining our capability with Marcus’s broad Living Sector expertise and background in large scale residential operating platforms. We are very happy to have partnered with MN and to have secured their trust and commitment as a long-term investor.”Alex Greaves, Head of UK and European Living, M&G Real Estate
Increasing the availability of low carbon and energy efficient housing across Europe forms a key tenet of M&G Real Estate’s net zero pathways. The company is also one of the founding signatories of the Better Buildings Partnership Climate Change Commitment, committed to achieving net zero carbon across its global portfolio by 2050.
“With clear supply/demand imbalances across Europe’s residential spectrum, we have a vast landscape of opportunity and a chance to combine a resilient – and mostly inflation-linked asset class – with geographical diversification. We are looking to acquire highly ESG-accredited assets in locations with strong underlying demographics to deliver compelling returns for our clients.”Marcus Eilers, Head of European Residential, M&G Real Estate
The Fund has already made a €75m maiden investment in Finland – a landmark Art Nouveau building which includes 124 premium serviced apartments in central Helsinki, which will form the new heart of the Katajanokka district. The development is a five-minute walk from the central business district. A mix of retail outlets at ground level is a direct result of a survey carried out with local residents and includes restaurants, grocery stores and health and beauty outlets. Recently refurbished to a high standard, it has achieved the highest LEED Platinum score in its class in Europe and the second highest in the world in the same category.