M&G Real Estate’s pan-European open-ended property fund has made its debut in the serviced apartment sector with the €73.5m acquisition of two assets in Germany.
The €5.2bn European Property Fund has forward-purchased two German assets, developed by local real estate firm Livory.
They comprise a newly refurbished 183-unit property in Berlin and a new development in Bielefeld, delivering 221 fully furnished apartments and a ground-floor retail unit.
Both assets are subject to 20-year terms leased to Livory’s sister company, Smartments.
Simon Ellis, manager of the M&G European Property Fund at M&G Real Estate, said: “This transaction marks our debut into serviced apartments – a sector which is gaining strong momentum across Europe, and particularly in Germany, supported by catch-up potential, solid performance and rising investor interest.
“Despite this momentum, the sector remains structurally undersupplied, offering an attractive opportunity for investors to tap into a still relatively small but expanding segment of the living and hospitality market across Europe’s key gateway cities. Both cities present compelling fundamentals, underpinned by supply demand imbalances, strong rental dynamics and solid occupancy levels, supporting the serviced apartments sector’s long term growth prospects.”
Simon Behr, managing director at Livory, said: “This transaction confirms institutional demand for modern, high-performing serviced apartment products in Germany.
“Livory’s expertise in the conception and development of assets with high-quality standards, clear ESG credentials and prime locations were a key factor for the transaction – and lay a solid foundation for the future performance of the properties.”
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