M&G Real Estate (M&G) has made its first private rented sector (PRS) deal in Germany following an agreement to finance the construction of 230 apartments in Bad Homburg vor der Höhe, near Frankfurt. The funding has been agreed on behalf of the €4.4 bn M&G European Property Fund, as part of the fund’s expansion into residential markets across Continental Europe.
The deal marks the fund’s first residential acquisition in Germany, bringing its investments in the country to more than €1 bn across the retail, office and logistics sectors. The fund will finance three out of the seven construction sites within the Victoria Gärten development, which is located within easy reach of Frankfurt’s central business district.
Classified as a KfW Efficiency House 55 Victoria Gärten will use 45% less energy than a standard new building and will be served by a centralised energy efficient heating system serving the entire district.
David Jackson, manager of M&G European Property Fund, said: 'Victoria Gärten is our first residential acquisition in Germany, a key step in the Fund’s expansion into Europe’s residential markets, boosting the portfolio’s diversification between different countries and economic cycles within the continent. This is our fifth European residential acquisition in the last 12 months, bringing the Fund’s exposure to the sector closer to our target of 20%. We expect this growth to continue in the coming months, given our current pipeline.'
