Mon, 15/07/2019 - 13:08
PGIM Real Estate has established an investment partnership with French subsidised housing specialist developer, Groupe UNITI.
The shortage of social housing is critical across France, with over two million households awaiting affordable accommodation and delivery amounting to only 100,000 new homes every year. The lack of affordable senior housing is even more severe, particularly in regional cities where new projects are extremely limited.
Jocelyn de Verdelon, PGIM Real Estate head of France, says: "The shortage of subsidised housing, including social, intermediate and affordable senior housing, highlights a serious lack of funding despite high demand across all French regions. With nearly EUR600 million in transactions in 2018, we want to pursue value creation by positioning ourselves in this segment through a partnership that will be both a driver for social cohesion and long-term investment performance.”
The partnership structured by PGIM Real Estate will take the form of two interlinked and concomitant operations.
First, PGIM Real Estate and UNITI will create a development joint-venture named UNITI Croissance, which will form the core of the firm’s operations and will be focused on social, intermediate and affordable senior housing, with some PRS units. PGIM Real Estate’s discretionary pan-European value-add fund and UNITI will commit nearly €35m to the joint-venture, to deliver over EUR200 million worth of new homes.
Second, the PGIM Real Estate fund will take a 35% equity stake in Groupe UNITI to support its growth into one of the leading providers of subsidised housing across France.
Verdelon points out: "This UNITI Croissance partnership illustrates PGIM Real Estate's ability to source innovative and complex off-market operations in an asset class new to institutional investors.”
“This operation will support our partner, UNITI, by securing its project pipeline and enabling it to become one of the social housing champions in France, with the aim of making tomorrow’s cities more sustainable.”
Stéphane Oria, Groupe UNITI CEO, says: “We are proud to welcome a partner like PGIM Real Estate among our shareholders to deliver UNITI Croissance. Beyond financing support, this partnership will allow us to benefit from PGIM Real Estate’s strategic expertise. We are convinced this operation is a major step towards reaching our goal to become one of the leading social housing developers in France.”
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