M&G To Grow PRS Presence In Dublin As International Investors Target City
M&G’s European Living Property Fund is looking to make more rented residential acquisitions in Ireland after agreeing a €99.5M deal to buy Eglinton Place in Dublin.
Located close to the city centre, Eglinton Place has 148 PRS homes made up of one-, two- and three-bed apartments, which will be ready for occupation in Q2 2023.
Becoming the latest pan-European investor to target the Irish private rented sector, M&G launched the fund in early January with €578M of equity — including €400M from MN, one of the largest pension administrators and asset managers of Dutch pension funds.
The fund aims to invest in Europe’s student housing, single and multifamily housing and retirement living sectors and started with a €75M debut acquisition in Helsinki, Finland.
"In the current environment we are definitely looking to buy in attractive and resilient locations in attractive markets and cities," M&G Head of European Residential Real Estate Marcus Eilers told Bisnow in an interview. "Ireland is important to us because it's also in our core Europe 'bucket' where we have our highest-ranked locations."
"Compared to Germany and France that are also in that bucket, the Irish market offers higher returns. So therefore, it is very attractive,” he added.
Eilers said that with “extremely restricted supply across Ireland” the development also sits within the investor’s targeted deal size of €50M to €120M.
“It is only the second investment but we are looking to do more in Ireland," he said. "We are building our footprint across Europe, so the next acquisitions are potentially in southern Europe, Germany and France. But we will return to Ireland at some point, hopefully this year."
M&G’s European Living Property Fund was also attracted by the near-term delivery of the project and its very high ESG credentials — the development is targeting a BREEAM ‘Very Good’ certification as a minimum by developer Richmond Homes.
“Most developments we are looking at are about two years from completion, but yes we prefer those that are being delivered sooner," Eilers said. "The challenging part on existing assets is that anything older than five years may not meet our ESG requirements. We are an open-ended, very long-term investor so we need the best possible starting point."
Eglinton Place meets that requirement, with energy sourced from a combination of a district heating system and solar roof panels, hot water heat pumps, electric radiators, green roofs and EV charging, plus 208 bicycle spaces.
M&G is not the only pan-European investor to target Dublin’s burgeoning PRS sector. In October 2002, Hammerson and Allianz Real Estate started construction on The Ironworks, their first Irish residential-led scheme.
Hammerson is developing The Ironworks on behalf of Dundrum Retail Limited Partnership, a 50-50 Allianz and Hammerson joint venture that owns and operates Dundrum Town Centre.
Located on the Sandyford Road entrance to the Dundrum Estate and spread across 27 acres, the 122-apartment scheme forms part of the proposed redevelopment of the old Dundrum Shopping Centre and is due to be completed by 2025.
