German firm funds block for rentals
GERMAN investment manager Patrizia Immobilien has confirmed its intention to forward fund the €130m development of 319 Build-to-Rent (BTR) apartments at the Cosgrave Property Group’s Honey Park development in Dun Laoghaire, south county Dublin.
Patrizia’s acquisition of the apartments, which are scheduled to be finished construction between June and November 2018, is part of the company’s strategy to increase its investment in Dublin’s emerging BTR sector to 400 residential units.
The announcement comes just days after US real estate giant Hines announced its intention to develop 1,269 apartments for the rental market as part of the proposed ‘town centre’ component of its Cherrywood scheme in south Dublin.
While Build-to-Rent (BTR) is well established internationally, it is a relatively new phenomenon here.
Its popularity with institutional investors such as pension funds is understandable as the rental incomes derived from letting residential units in large numbers provide steady returns over many years, and through the peaks and troughs of economic cycles.
Dublin in particular has seen the emergence in a short time of a new breed of institutional landlords, who buy whole blocks to rent.
Ires Reit is the biggest, with 2,377 apartments spread across its Dublin sites.
US real estate giants Kennedy Wilson is also a significant landlord in the market with 2,100 units either built or under construction.
It recently stated its aim to have 5,000 homes for rent in Ireland in the future.