PGIM Real Estate has acquired a portfolio consisting of three residential properties in Germany, on behalf of its European core strategy, which now exceeds €1 billion of equity capital. PGIM Real Estate is the real estate investment business of PGIM, the US$1.5 trillion global investment management businesses of Prudential Financial, Inc. (NYSE: PRU).
In less than two years since launch, the European core strategy has gathered over €1 billion in equity capital, with core investments in the logistics, residential and office sectors in Europe’s major metropolitan markets. The strategy joined the INREV ODCE index in 2020.
The latest acquisition is a total of 285 residential units in the districts of Wettbergen and Bemerode in Hanover, Germany. The portfolio consists of three high-quality low-rise buildings and a total lettable area of 18,622 sq m. Large urban areas, such as Hanover, have seen relatively strong population growth in recent years, which has driven household creation, demand for residential properties and rental increases.
The European core strategy’s residential allocation comprises properties in competitive areas throughout major cities, recently demonstrated by its acquisition of two residential properties in the 16th arrondissment of Paris; and commuter belt locations with strong residential demand, such as the recent investment in a multifamily development in Brighton, UK. Since July 2019, the strategy has built a strong logistics portfolio with major investments in France, Germany, the Netherlands and Northern Italy. Its office portfolio concentrates on investments in Germany and Paris.
“Our European core strategy focusses on sustainable, steady growth and is managed with a very long-term view,” commented Sebastiano Ferrante, deputy head of Europe at PGIM Real Estate. “The strategy is relatively young with an allocation built for the future. It is positioned differently from others in the market, with a strong focus on transparency and our unique ability to combine the capability for active asset management with a very defensive investment philosophy focussed on fundamentals. We have gathered significant assets in the strategy in a short period of time, demonstrating that our approach is resonating with investors.”
“With large exposure to sectors such as logistics and residential and a focus on liquid transparent markets such as the UK, Germany and France, our portfolio has maintained a strong resilience in the current COVID-19 induced market uncertainty,” he continued. “The residential acquisition in Hanover fits perfectly with our investment strategy and demonstrates our ability to continue to secure attractive properties with outstanding quality in competitive markets.”