M&G European Property Fund acquires two serviced apartment properties from Livory for EUR 73.5 million, making it its first investment in the serviced apartments segment

M&G Real Estate, part of M&G's €93 billion¹ private markets business, has acquired two serviced apartment properties in Berlin and Bielefeld for the €5.2 billion European Property Fund (the Fund) as part of a forward purchase. The total transaction volume amounts to EUR 73.5 million. The two transactions also mark the first strategic investment in the serviced apartments segment in Europe. The properties were developed by Livory, a German real estate developer with a focus on build-to-rent (BTR) and serviced apartments.

Since the pandemic, the demand for serviced apartments has expanded significantly and continues to grow faster than the classic hotel market. The reasons for this are changing travel habits and the increasing need for flexible accommodation solutions for an increasingly mobile working world. The segment appeals to a broad user group – including business travellers, project employees, relocation customers, commuters and tourists – and ensures stable occupancy rates with both short and long-term stays. As supply remains limited in many markets, the sector is benefiting from attractive long-term fundamentals. At the interface between the residential and hospitality asset classes, serviced apartments offer investors access to two structurally attractive real estate segments. Long-term leases with established operators also enable inflation-linked income, defensive investment characteristics and diversification of cash flows in the portfolio.

The property in Berlin has 183 fully furnished apartments and is fully modernized. It is located in the sought-after district of Prenzlauer Berg and has excellent transport connections. The revitalisation was completed in April and included the installation of external sun protection, heat pumps, the modernisation of the cooling system and the redesign of apartments and the lobby. The property has an EPC A rating and is aiming for BREEAM3 In-Use certification in the "Very Good" category.

The Bielefeld property is a new building with 221 fully furnished apartments and a commercial unit on the ground floor. The property has been in operation since February 2026 and is located directly at the main train station. The old town and the shopping street are within walking distance. The building was constructed according to a very high energy efficiency standard. It does not require any fossil fuels at all, and the heat is supplied via a district heating network. The aim is to achieve DGNB3 Gold certification and an EPC A rating.

Both properties will be leased under a 20-year lease to smartments, a sister company of Livory and an established operator of serviced apartments in Germany.

With a track record of almost 20 years, the fund continues to invest capital consistently. In the past nine months, acquisitions with a volume of more than 1.6 billion euros have been completed or agreed. The strategy invests specifically in high-quality real estate in established European locations whose long-term demand, limited supply and sustainability aspects are expected to generate stable income and long-term performance for institutional investors worldwide.

Simon Ellis, fund manager of the M&G European Property Fund at M&G Real Estate, says: "With this transaction, we are investing for the first time in the serviced apartments segment – a market that is gaining momentum throughout Europe and especially in Germany. This development is driven by significant catch-up potential, robust operating performance and increasing interest from institutional investors. At the same time, the supply is still structurally limited. This opens up the opportunity for investors to participate at an early stage in a comparatively small but fast-growing market segment at the interface of residential and hospitality in Europe's most important cities. Both Berlin and Bielefeld have convincing fundamentals with supply bottlenecks, a positive rental trend and high occupancy rates – the best prerequisites for the long-term growth of the segment."

Simon Behr, Managing Director at Livory, adds: "The transaction confirms the high demand from institutional investors for modern and efficient serviced apartment concepts in Germany. Our expertise in developing high-quality properties with clear ESG standards and prime locations was a key success factor of the transaction and at the same time creates a solid foundation for the long-term performance of the two properties."

Notes to editors

1. Assets under Management (AuM) as at 31 December 2025
2. Gross Asset Value (GAV) of the fund as of March 31, 2026.
3. The certifications or ratings mentioned do not constitute a recommendation. For more information, see: breeam.com and dgnb.de.

Details about the properties