AXA IM - Real Assets forms JV with Kennedy Wilson
AXA Investment Managers - Real Assets (AXA IM - Real Assets) has entered into a 50/50 joint venture (JV), on behalf of clients, targeting the Irish Private Rented Sector (PRS), with Kennedy Wilson, investing in a 50 per cent stake in three prime Dublin PRS schemes comprising 1,173 units.
Kennedy Wilson owns the remaining 50 per cent interest. The investment marks AXA IM - Real Assets entry into the Irish PRS market.
The JV’s initial portfolio comprises the Alliance, Sandford Lodge and Clancy Quay PRS assets which are all in prime city locations. The JV also has a strong pipeline of additional investment opportunities that are in line with its strategy of seeking PRS developments or operating assets across Ireland, targeting Dublin and other large urban centres. Kennedy Wilson will act as asset manager for the JV.
There is a strong supply-demand imbalance in Dublin due to a chronic housing shortage in recent years (post-2008 economic contraction), a growing population and decreasing household sizes. Furthermore, the PRS sector in Dublin remains underdeveloped and highly fragmented, in a city where there is a housing deficit that stands at around 50,000 units.
John O’Driscoll, European Head of Transactions at AXA IM - Real Assets, says: “We are long term investors in the private rented sector and this transaction adds to our existing global residential portfolio which is valued at over EUR9 billion. At the same time, we are pleased to be forming a new joint venture with Kennedy Wilson, one of the biggest PRS investor/operators in Ireland.”
“The portfolio is well placed to benefit from Dublin’s continued and growing position as an attractive destination for global companies’ European HQs, whilst the market also offers strong supply-demand dynamics. We believe that these supportive underlying market dynamics will allow us to extend our already strong pipeline of Irish PRS opportunities and we look forward to working with the team at Kennedy Wilson to execute these.”
Mary Ricks, President and CEO of Kennedy Wilson Europe, says: “The Kennedy Wilson Residential proposition of professionally managed, high quality PRS units and premium tenant amenities has cemented our brand in the Dublin PRS market. We have further proven our credentials as a pioneer in PRS developments, where we have already built or are under construction on 778 units across our Dublin PRS portfolio and have an attractive pipeline of future opportunities.
“The Dublin residential market has undergone significant structural change in the last five years leading to demand outstripping supply and making today’s announcement a milestone for our business in delivering much-needed rental housing. We are thrilled to be partnering with AXA IM - Real Assets, a global leader in real assets investment, and its team, who add extensive experience and significant value to our partnership. We are like-minded in sharing our positive vision and long-term outlook for the Irish PRS market and look forward to building out a premier PRS portfolio and capitalising on the exciting opportunities for future growth.”