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Focus On 'Create Core' Investments Leads PGIM To Go Residential And Regional

Birmingham's Jewellery Quarter, a growing regional residential favorite

As inflation roars toward double digits, and the economic outlook turns distinctly turbulent, PGIM Real Estate is to focus on 'create core' investments in liquid markets, the firm’s head of European debt has said.

The pledge comes as the $209B, U.S.-based real estate business homes in on residential development in the UK regions, starting with a partnership deal signed this week with Birmingham-based Court Collaboration.

The funding partnership will support the acquisition and development of a 550-unit build-to-rent scheme in central Birmingham. The site at Brindley Drive is close to the Paradise office-led redevelopment. 

“This financing loan demonstrates our continued focus on ‘create core’ real estate assets in liquid markets such as the UK. This focus is driven by the structural trends we identify in residential, a sector seeing a strong generational shift in living needs, with rising demand for premium housing,” said Andrew Macland, PGIM Real Estate's head of European debt.

The consummation comes after two years of increasingly serious flirting between Court and PGIM.

PGIM disclosed earlier this year that it planned to double its exposure to European markets to $15B, Real Estate Capital News reported.

The strategy focuses on beds, sheds and data centres, but has also embraced offices. In April 2022 the New Jersey-based investor bought offices in London, Paris and Amsterdam as it allocated resources to 'winning cities' with growing populations and affluence. The firm said at the time it was part of a live-work-play approach to commercial floorspace, a combination that had already shown the potential to improve office rental growth.