M&G European Property Fund embarks on EUR85m French residential project
The EUR4.2 billion M&G European Property Fund, managed by David Jackson and Simon Ellis, has made its first French private rented sector (PRS) acquisition in Clichy-la-Garenne, north-west Paris.
Les Boréales - a 11,100 sq m development – was acquired for EUR85.3 million as part of the Fund’s continued objective to increase residential exposure in Continental Europe.
M&G took this rare opportunity to fund the development of this prime residential asset in the Paris area, which sits in the global top tier of residential markets, given its size, affluence and supply/demand imbalance. Private sector rental values have increased by 22 per cent over the last 10 years and this buoyancy is expected to continue due to an ongoing housing shortage and steep rental costs in central Paris, which have been unaffected by the Covid-19 pandemic. Affordability constraints in the central Paris have subsequently prompted families to look further afield, pushing prices up in Clichy by 37 per cent over five years, making it one of the fastest growing communes versus surrounding areas in north west Paris.
Already well connected to the capital, Clichy-la-Garenne is set to benefit further from the forthcoming northern extension of the fully-automated Line 14 and other major improvements to the city’s infrastructure. Clichy’s ongoing urban transformation programme is also supporting many new office, residential and retail development and refurbishment projects, enabling it to attract the likes L’Oréal, G7, Amazon France and Sony.
Les Boréales will consist of 150 apartments in four separate buildings as part of a larger development, which will have a strong focus on sustainability and wellbeing. Light-filled apartments of varying sizes with large window areas and balconies will look on to private gardens and bicycle stores, which will be within walking distance to public transport, schools and retail outlets. The apartments will be ready for occupation late in 2023.
David Jackson says: “This acquisition is another key milestone in the Fund’s recent expansion into residential markets across continental Europe. It follows recent transactions in Finland, the Netherlands and Italy, including PRS, senior living and purpose built student accommodation. This high quality residential portfolio provides strong diversification and long term rental growth potential for our investors.”