Principal Real Estate’s open-ended long-income euro-zone fund has invested €20m in an Irish social housing portfolio.

The manager said its Principal Eurozone Durable Income Fund has acquired the portfolio in Dublin from New Beginning and the Irish Social Housing Fund, an affiliate of RoundShield Partners.

The portfolio, which include 55 individual and family homes, is let to Dublin’s local authorities on long-term 25-year leases.

Giles Smith, head of fund management at Principal Real Estate, said: “Already acute, the need for social housing in Ireland has only intensified during the course of the COVID-19 pandemic.

“This transaction is among the first of our institutional acquisitions in the Irish social housing sector, simultaneously meeting investor demand for long term CPI-linked income streams of investment-grade credit quality while also supporting the Irish government’s policy aim of drastically increasing social housing provision where it is most needed.”

The Principal Eurozone Durable Income Fund is the manager’s first dedicated long-income European real estate fund, co-designed with Willis Towers Watson, is expected to have an investment volume in excess of €800m over the first five years of its life.

The fund expects to provide a total return that will track Eurozone CPI plus appropriate real estate risk premia through investment in long leased euro-zone real estate assets.

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