M&G to invest €1.2b in UK housing with Asian pension fund

M&G Investments (M&G) has announced a £1 bn (€1.17 bn) investment into UK multi-family housing, aiming to construct over 3,000 rental homes in London and other regional cities facing housing shortages.

London

This initiative, funded by a leading Asian pension fund and M&G's £130 bn (€152.1 bn) With Profits Fund, will be executed by M&G Real Estate over the next three years. It seeks to bolster British housebuilding and support the UK government's goal of delivering 1.5 million new homes this parliament.
Having already invested £100 bn (€117 bn) in the UK economy, M&G is now channelling international capital into housing developments, primarily in London, Manchester, Bristol, Birmingham, and Leeds.
The UK residential property market offers an attractive long-term investment opportunity due to low housing delivery rates in London and demand for rental homes consistently outstripping supply. In London alone, 50,000 more homes are needed annually than are currently being built, and only 2% of privately rented homes are purpose-built.
M&G and the Asian pension fund have each contributed £300 mln (€351 mln) in equity to this venture. 
In May, M&G also formed a strategic partnership with Dai-ichi Life HD, Japan's largest listed insurer, to expand into European private markets and explore new business opportunities in Japan and across Asia.
Martin Towns, global head of M&G Real Estate, said: "This is a powerful demonstration of our business model in action - mobilising international capital to invest in UK housing in a sector where there is a shortage of high-quality homes. Through our investment into the real economy, we can build more homes where they are most needed, whilst delivering resilient, long-term returns for pension savers in both the UK and internationally."