M&G Real Estate, part of M&G’s €86bn private markets’, has acquired two residential properties with high sustainability credentials in Spain and Portugal for €126m.
Supported by strong on the ground origination teams in continental Europe, M&G said today (19 December) that the new acquisitions "align with M&G’s conviction on the solid fundamentals offered by the Living sector globally and the recovery of the broader real estate sector over the coming cycle, where Southern Europe stands out as one of the most sought-after destinations for long-term institutional investors".
In Valencia, the acquisition is a €80m private-rented scheme strategically located in front of Valencia’s Port and within walking distance to Turia Park, Valencia’s iconic Arts and Science Museum and Malvarrosa’s beach. The scheme compromises 331 high-quality private rental apartments which are almost fully let. With limited supply of new residential developments and more than 132,000 news homes needed to be built in Valencia by 2037, assets like this have become especially sought-after by investors.
In Lisbon, the acquisition is an off market deal to forward fund a €46m flex-living scheme adjacent to The Mile, M&G’s student accommodation development due to complete in 2025.
Located in Olaias neighbourhood, the property is well-connected with Lisbon’s airport and Parque das Naçoes. Ready for occupation in 2027, the scheme consists of 203 studios and 56 one-bedroom premium rooms, which will help alleviate local residential scarcity for short and medium term accommodation in Lisbon, a city welcoming over 250,000 new residents last year.
Martin Towns, deputy global head of M&G Real Estate, said: “As we enter the next real estate cycle, sectors once considered to be 'alternative' are now viewed as mainstream by many institutional investors. We expect the Living sector to be the main beneficiary as investors move to take advantage of today’s attractive entry point.
"With strong foundations investing across many real estate sectors and geographies, M&G is well placed to help institutional clients to diversify and internationalise their portfolios. We see opportunity to take advantage of the market upswing, tapping into the most attractive performance prospects the asset class has seen in many years."
Federico Bros, head of investment and asset management for Iberia at M&G Real Estate added: “Spain and Portugal are rapidly becoming one of the most sought-after destinations in Europe, with the number of foreign residents increasing by 50% and 30% respectively in recent years.
"We are extremely pleased to be able to source these high-quality assets, which will deliver best-in-class living space in markets with large housing undersupply while helping to provide attractive, risk adjusted returns to institutional investors.”
M&G Real Estate runs €43bn of assets across the world with European offices in Paris, Amsterdam, Frankfurt, Luxembourg, Madrid, Milan and Stockholm.
