The Irish Social Housing Fund (ISHF) and New Beginning have sold 55 social housing homes in Dublin for just over €20m to UK-based Principal Real Estate.
The homes are let to Dublin’s local authorities on 25-year leases.
As of last year, the IHSF, which was founded by debt-advisory firm New Beginning, has invested more than €100m in equity to buy 400 houses and apartments that it works with local authorities to refurbish. The homes are then offered at discounted rents for social housing.
ISHF was founded in conjunction with investment firm Roundshield.
New Beginning’s chief executive and co-founder is barrister Ross Maguire. He established the venture in 2010 to assist people with distressed mortgages.
Principal Real Estate Europe is part of Principal Financial Group’s dedicated property business, Principal Real Estate Investors, which manages or sub-advises more than $85bn in property assets around the world.
Giles Smith, the head of fund management at Principal Real Estate, said that there was already an acute requirement for social housing in Ireland, which has been intensified during the pandemic.
“This transaction is among the first of our institutional acquisitions in the Irish social housing sector, simultaneously meeting investor demand for long-term CPI-linked income of investment-grade credit quality while also supporting the Irish government’s policy aim of drastically increasing social housing provision where it is most needed,” he said.
Last year, ISHF refinanced its portfolio to secure an additional €30m in financing from AIB to buy about 100 homes.
New Beginning also planned the launch of a second fund that will be used to help developers deliver additional homes.
Those units will be bought by the fund and then leased for social housing.
Last year, AIB launched a €300m social housing fund to bankroll the construction of 2,000 homes across the country.
The new fund is expected to be fully allocated over two years.
The development funding can be provided at higher gearing levels than for private schemes, based on purchase contracts from local authorities and approved housing bodies.
AIB chief executive Colin Hunt said the bank had allocated all its initial €100m social housing fund. He said that the bank had already allocated more than €500m to help deliver social housing properties.