M&G Real Estate Acquires €56 Million Berlin PRS Scheme, Adding 145 Rental Homes to European Property Fund
M&G Real Estate has agreed to forward-fund a €56 million private rented sector development in Berlin, acquiring 145 rental apartments at Landsberger Allee 116 on behalf of the €5.4 billion M&G European Property Fund. The deal, announced September 23, 2026, is expected to complete by the end of 2027 and marks a further step in the fund's deliberate expansion into European Living assets.
Deal Structure and Property Details
The scheme is located on the border of Berlin's Pankow and Lichtenberg districts, close to the neighborhoods of Prenzlauer Berg and Friedrichshain, with public transport connections to central Berlin, Berlin Hauptbahnhof and Berlin Brandenburg Airport. The development spans 7,660 square meters of residential space — approximately 82,451 square feet — across 145 apartments and 41 parking spaces, implying a price of roughly €386,207 per unit and approximately €7,311 per square meter.
The transaction is structured as a forward funding agreement, with Quarterback Immobilien AG serving as developer. The firm has completed more than 25,000 residential units since 1993. Completion is targeted for the end of 2027.
The building is designed to meet an EPC A energy rating and BREEAM New Construction Excellent certification. Planned features include heat pumps supported by district heating, underfloor heating, floor-to-ceiling windows, built-in kitchens and smart metering technology.
Fund Strategy and Living Sector Allocation
The acquisition is being made on behalf of the M&G European Property Fund, which had a gross asset value of €5.4 billion as of June 30, 2026. M&G Real Estate is part of M&G's €96 billion private markets business and manages approximately €40 billion in real estate assets under management globally.
Simon Ellis, Fund Manager of the M&G European Property Fund, said the Berlin deal, alongside other recent transactions, is moving residential exposure toward 30% of the portfolio. "Living sector assets continue to demonstrate strong long-term occupier fundamentals and remain one of our highest-conviction themes across Europe," Ellis said. "As the Fund approaches its 20-year anniversary, we continue to identify attractive opportunities to deploy institutional capital into high-quality housing in supply-constrained European cities, delivering resilient income for investors while making a meaningful contribution to the real economy."
Thomas Kächele, Head of Germany at M&G Real Estate, cited Berlin's rental market structure as a key driver of the investment. "Approximately 85% of households in Berlin rent their homes, making it one of the largest residential investment markets in Europe," Kächele said. "The asset benefits from its highly attractive location as well as excellent connectivity, making it well positioned to meet the needs of today's urban renters."
Berlin's Housing Market Context
The acquisition comes against a backdrop of persistent housing undersupply in Berlin. The city's population reached 3,700,577 at the end of 2025, having grown by 15,312 people, or 0.4%, during the year. At the same time, apartment completions fell to 11,027 in 2025, a decline of 28.2% from the prior year. Although building permits rose 40.7% to 13,754 apartments in the same period, the gap between approvals and completed homes points to continued near-term supply constraints.
Berlin's population has grown by more than 500,000 people since 2010, an increase of nearly 16%, while approximately 159,000 new apartments were built over that same period. The city's updated housing plan estimates a need for 211,000 additional homes between 2026 and 2040, including 138,000 units to relieve existing shortages and 73,000 linked to projected population growth.
Advertised rents have risen sharply over the longer term. The median advertised rent reached €15.78 per square meter in 2025, compared with €9 per square meter in 2016, an increase of approximately 75%. New-build apartments commanded a median asking rent of €19.97 per square meter in 2025. More recently, median asking rents for new lettings declined 4.3% to €18.66 per square meter in the first half of 2026, with new-construction rents averaging €21.92 per square meter, down 0.8% year over year — a moderation in the pace of growth rather than a reversal of underlying demand. The city's vacancy rate stands at approximately 2%.
Sustainability and Institutional Standards
The scheme's sustainability targets — EPC A and BREEAM New Construction Excellent — align with M&G Real Estate's stated preference for institutional-quality assets with strong environmental credentials. The combination of heat pumps, district heating integration, underfloor heating and smart metering is intended to reduce energy consumption and support tenant appeal in a market where new-build professionally managed rental housing commands a premium over older stock.
The Berlin acquisition adds to a portfolio of Living sector investments that M&G Real Estate has been building across supply-constrained European cities. With residential exposure in the M&G European Property Fund now approaching 30% of the portfolio, the fund's Living allocation has grown from a reported 19.7% by value in earlier assessments, reflecting the firm's continued conviction in the sector's long-term occupier fundamentals.
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