Urbeo Residential, a new mixed-tenure Irish housing fund, is planning to raise €300m-€400m (£266m-£356m) to invest in the Irish private rented sector.
While not acting as a developer itself, Urbeo will seek to partner with builders, developers, and housing associations to deliver new rental housing projects in non-prime but well-serviced locations, principally in Dublin, but also other Irish cities.
Urbeo has fully let its initial pilot scheme in Tallaght, Co Dublin. The 131-home New Bancroft development was acquired in July 2017 for €33m, in an investment backed by the Irish government’s €8bn Ireland Strategic Investment Fund.
Subject to certain conditions being met, it is proposed that ISIF will be an anchor investor in the planned scaling up of the fund, with capacity to commit up to €100m on a co-investment basis.
Urbeo has also recently signed a strategic relationship agreement with housebuilder Glenveagh Living to collaborate on the sourcing, acquisition and development of residential communities, with Urbeo acting as a potential acquirer of Glenveagh built developments.
Felix McKenna, chief executive at Urbeo Residential, said:“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.
“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.”
The fund is targeting a stabilised dividend yield of 4.5-5% and levered IRR of 8-10%.
Urbeo has appointed Deutsche Bank and Goodbody Stockbrokers to advise on the fund raising.
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