Union Investment has made its first residential investment in Ireland with the acquisition of the 8th Lock residential project in Dublin from British and Irish developer Ballymore.
The €200 mln forward funding transaction on behalf of Union’s UniImmo: Deutschland follows Union’s entry earlier this year in the Finnish housing market with the purchase of the Hyperion development in Helsinki.
The deal is the first ever Irish forward funding by an end investor. Unlike with a forward purchase agreement, with forward funding the buyer gets involved at an early stage of development and makes payments based on construction progress. Union Investment finances the purchase 100% with equity.
’The purchase is part of our strategic focus on further expanding the share of residential investments in selected European core markets with the aim of ensuring long-term diversification and stabilisation of our portfolio,’ said Martin Schellein, head of Investment Management Europe at Union Investment Real Estate. ‘Ireland has the youngest population in Europe and is experiencing strong demographic growth. With multinational companies continuing to base themselves here, there is high demand for affordable housing, especially in Dublin.’
The transaction represents Union Investment’s third major investment in the residential market. The fund manager entered the sector in 2019 with the purchase of the Y-Towers development in Amsterdam for UniImmo: Europa.
The 8th Lock residential project comprises five sections which are between four and thirteen storeys high and due for completion between October 2023 and March 2025. Altogether the site will offer 31,000 m2 of rental space, with 435 furnished apartments accounting for some 28,000 m2.The rest of the space is earmarked for commercial use. There will be shared underground parking beneath the development with room for 242 cars and 960 bicycles.
The future residential quarter is located in Ballymore’s already established Royal Canal Park northwest of Dublin's city centre. It is just 300 metres from the new Pelletstown railway station, which is due for completion this summer.
Union Investment was advised by CBRE, A&L Goodbody and PWC.