Urbeo housing fund to raise €400m to invest in rental sector

A new housing fund is planning to raise up to €400 million to invest in the private rental sector to provide housing to what it views as underserved segments of low and middle income households.

Urbeo Residential is a new mixed-tenure Irish housing fund, and will principally focus on Dublin, although it will also look at other Irish cities.

The fund, which has a pilot scheme already fully let in Tallaght, has signed a strategic relationship agreement with Glenveagh Living that will see the two organisations collaborate on the sourcing, acquisition and development of residential communities. Urbeo will also act as a potential acquirer of Glenveagh built developments.

The first scheme was the 131-unit New Bancroft development, which Urbeo bought in July 2017 for €33 million. The investment was backed by the Ireland Strategic Investment Fund (ISIF) and others.

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ISIF is expected to invest in the planned scaling up of the fund, potentially for up to €100 million.

Urbeo has appointed Deutsche Bank and Goodbody Stockbrokers to advise on the fund-raising. It said it would target institutional investors seeking long-term stable returns.

Clear gap

“We believe there is a clear gap in the market to provide a quality rental housing option to low and middle income households. Our aim is to create balanced and sustainable communities where the long-term stable tenant base is aligned with the requirements of investors for steady, secure income,” said Urbeo chief executive Felix McKenna.

“The residential rental sector has become an increasingly important asset class in recent years because it can provide a reliable income stream and diversification from other real estate asset classes.

“We are providing the first opportunity to invest in scale in European-style rental developments in Ireland, the type of which are long overdue in a market that has seen extremely rapid increases in residential rents in recent years.”