M&G Real Estate has broadened its alternatives exposure with its entry into the French senior living sector.

The manager said it’s European Property Fund has bought a €47m office asset in the Parisian suburb of Levallois-Perret, which will be redeveloped into a senior living complex.

Les Essentielles, a subsidiary of GDP Vendome and one of France’s senior housing and healthcare operators, will take a 12-year lease upon completion of the new development in the second quarter of 2021.

David Jackson, M&G European Property Fund manager, said: “Despite being a relatively new sector in France, we are already seeing strong demand for later living residential properties in and around Paris given the city’s ageing population and the current supply constraints in Levallois-Perret – an area undergoing a lot of office and residential redevelopment.

“Over the long term, we see significant opportunities to benefit from the evolution and growth of the sector and expect the supply/demand factors to drive significant rental growth over the medium term.”

Jackson said the company expects to announce more residential acquisitions across Europe in due course, consistent with ”our strategy to increase the allocation to the broader residential and lodging sector”.

M&G Real Estate said its European Secured Property Income Fund has also financed the construction of two elderly care and assisted living homes in Sweden.