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Residential impact fund adds €175m for affordable homes

CBRE Investment Management has raised a further €175 million in equity from three international institutional investors for the CBRE European Residential Impact Fund which will provide affordable housing.

The raise increases the fund’s equity volume to €640 million which has all been sourced from European institutional investors. The first closing took place in August 2021.

Berlin is one of ERIF’s target cities [Image: Gilly/Unsplash]

The fund, ERIF, invests in affordable middle-income housing in 15 European target cities, including Berlin, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart.

Tenants being targeted are those essential for a functioning city and that contribute to an inclusive community. Rents are deemed affordable if they account for a maximum of 30% of the disposable income of a middle-class household in the city in question.

“Our investment strategy aims at a home for people in key occupations, such as those working in education and training, the health sector or the police,” ERIF fund manager Paul Oremus said. “But active seniors are also part of it.”

Rents are also indexed and follow inflation, as it can be assumed that the regulations in many cities will limit rent increases or have already done so. CBRE-IM said that in this way, ERIF acts as a tenant-friendly landlord and at the same time creates an attractive investment opportunity for institutional investors looking for long-term and inflation-protected returns with relatively low risk.

ERIF is an open-ended, pan-European, Luxembourg-based SICAV-SIF aimed at professional investors. The total target volume is €3 billion assets under management within the next three to five years.