APG joins Hines in Cherrywood build-to-rent apartment development
Hines, the US real estate firm behind the sprawling Cherrywood development in South Dublin, has sold down part of the project to APG, the Dutch pension heavyweight, as part of new €450m joint venture.
The deal underscores the mounting institutional appetite for Ireland's booming property market.
Hines's decision to entice international investors was well-flagged. Last year, this newspaper reported the firm had split the entity that holds the majority of the Cherrywood strategic development zone, known as the Hines Cherrywood Development Fund Icav, into a number of smaller funds, a move that paved the way for fresh equity from external partners.
Under the terms of the deal, APG will fund the initial phase of the development and own some of the project's apartments and retail assets.
According to Hines's planning proposal, which was submitted in September, the first stage of Cherrywood will include 1,221 rental-only apartments, along with shops, restaurants, cafes and community facilities.
APG's decision to join forces with Hines on Cherrywood marks the pension firm's first significant foray into the Irish property market. It also sets the stage for future investment in the development according to sources.
Brian Moran, senior managing director with Hines Ireland described the deal as "a major endorsement for the Cherrywood Project".
"Hines has a strong existing relationship with APG in the development of real estate projects throughout Europe," he said and described the pension heavyweight as "a trusted and highly regarded international investment partner".
Mr Moran stressed that Cherrywood ranks as Ireland's first purpose-designed Build-to-Rent scheme and claimed that when complete the project "will set a new standard in modern urban living for the residents of this new town in South Dublin".
Robert-Jan Foortse, Head of European Property Investments of APG stressed he pension outfit had "made comparable long-term residential investments in other markets", including the Netherlands, London, Madrid, and Helsinki.
He said "We are continuously looking for attractive real estate investments that help us realise stable and long-term returns for our pension fund clients and their participants."
In a severely under-supplied market such as Dublin, we are pleased that this investment addresses this unserved demand in a meaningful way by enabling the development of over 1,200 dwellings."