M&G Real Estate continues to invest in French residential

Student residence in Clichy-la-Garenne

Senior residence located in Aix-en-Provence (13).

Senior residence located in Aix-en-Provence (13).
© Cogedim

Never two without three. M&G Real Estate, on behalf of its core vehicle M&G European Property, concluded a third investment in French residential at the start of 2022. After investing €47 million in a senior service residence project in Levallois-Perret in 2019, then €85 million on a building with 150 apartments in Clichy-sur-Seine last year, M&G Real Estate signed a new investment of around €56 million relating to two assets.

In Clichy-la-Garenne, M&G Real Estate has acquired its first student residence in France off-plan. Co-developed by Cogedim and Serpi, it will be managed by operator Nemea under a long-term lease.

The fund also acquired off-plan a residence for the elderly located in the city center of Aix-en-Provence in the PACA region, developed by Cogedim. This asset is notably part of a high-end residential program. “This acquisition follows a first operation in Levallois-Perret in the highly sought-after sector of senior residences”, explains M&G Real Estate.

Both projects were selected for their fit with M&G Real Estate’s ESG strategy. “In accordance with the new European directive on the energy performance of buildings, newly built buildings will meet the latest technical, environmental and safety requirements for housing in France”. They will be NF Habitat HQE certified.

In addition, the well-being of residents will be particularly taken into account within these residences. In particular, they will benefit from immediate access to transport or local services.

In recent quarters, M&G Real Estate has significantly increased its exposure to the residential sector in continental Europe and in particular in France. This new allocation is based in particular on “the analysis of long-term demographic trends, generating a growing demand for quality housing”, but also on a “now structural shortage of land, authorized projects and therefore of quality products”.

“The need for residential space, whether for students or retirees, is a major trend in the real estate market, which is not about to slow down,” says Antonin Prade, investment director of M&G Real Estate in France. However, demand is likely to vary from city to city and requires a thorough understanding of trends in micro-markets, such as demographic flows or university clusters. From a long-term perspective, we expect the retirement home sector as well as the student residence sector to generate strong risk-adjusted performances.”

For Dimitri Doublet, Director within the management team of the M&G European Property Fund: “This investment marks another important step in the simultaneous strengthening of the fund’s exposure to France and the residential sector. It guarantees strong diversification and solid long-term rental growth potential for our investors. The residential market in Europe’s major cities remains unbalanced and constantly strained by the scarcity of supply. Highly populated areas in France like Paris or Aix-en-Provence are no exception. In this context, we believe that these highly sought-after residential assets offer the benefits of more resilient flows and lower volatility with clear long-term upside potential.”


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