Urbeo Residential, a new Irish housing fund, plans to raise €300-400 mln to scale up its investments in the Irish private rented sector (PRS).
The fund said on Wednesday that it has appointed Deutsche Bank and Goodbody Stockbrokers to advise on the fund raising, targeting institutional investors seeking long-term stable returns.
Urbeo’s model is focused on matching investor needs for long-term stable returns with those of tenants to build stable and sustainable communities of rental housing, including social and affordable housing. The fund is targeting a stabilised dividend yield of 4.5–5% and leveraged IRR of 8–10%.
The fund’s main focus is on providing rental housing for low- and middle-income households in underserved areas of Dublin, but also other Irish cities.
While not acting as a developer itself, Urbeo will seek to partner with builders, developers, and housing associations to deliver new rental housing projects in non-prime but well-serviced locations.
Felix McKenna, CEO of Urbeo Residential said: ‘We believe there is a clear gap in the market to provide a quality rental housing option to low- and middle-income households. Our aim is to create balanced and sustainable communities where the long-term stable tenant base is aligned with the requirements of investors for steady, secure income.’
Urbeo said it has fully let its initial pilot scheme in Tallaght, Co Dublin. The 131-unit New Bancroft development was acquired in July 2017 for €33 mln in a transaction backed, among others, by the Ireland Strategic Investment Fund (ISIF), an €8 bn Irish government-owned fund that invests with a long-term horizon.
Initial investors, and Urbeo Residential co-founders, include Bill Nowlan and Frank Kenny who were behind the establishment of Hibernia REIT in 2013, a Dublin office-focussed REIT with a portfolio valued at over €1.2 bn. McKenna is a former senior asset manager at Ireland’s National Asset Management Agency (NAMA) where he helped build the agency’s social housing portfolio.
