The £69 million investment - M&G's first in the UK senior living sector - represents the first phase of a partnership that could deliver more than £200 million of purpose-built later living communities over the next five years.
The two properties, which comprise 125 one-, two- and three-bedroom apartments, are located in Sidcup, Kent, and Woking, Surrey, where there is a strong demand for assisted living among those looking to downsize or move out of London.
Both properties have been specifically designed for the senior generation, "with high levels of amenity enabling residents to maintain independence and enjoy the benefits of a community, but without the burden of property ownership".
Made on behalf of the £1.2 billion M&G UK Residential Property Fund, the investment reflects the growing investor appetite for the nascent retirement rental sector, driven by the rising demand for high-quality senior living accommodation in the UK.
Under the terms of the the partnership with M&G, Birchgrove will continue to manage Sidcup and Woking and any other similar properties that the fund acquires. Birchgrove was launched in 2017 by Bridges Fund Management - a specialist sustainable and impact investor with a track record of property development in the care sector.
Honor Barratt, managing director of Birchgrove, said: "In Bridges Fund Management Birchgrove has always had a partner who believes wholeheartedly in the value of achieving better outcomes for our residents and for the planet. We're delighted to be entering into this long-term partnership with M&G, which will allow us to move forward on an even stronger, more sustainable footing. That will not only benefit Birchgrove's existing residents; it will also enable us to build and operate more beautiful homes and communities for those of us who want to join our quiet rental revolution."
Alex Greaves, head of UK & European Living at M&G, added: "The principle of renting a retirement home instead of owning a property at this key life stage has significant merits. Individuals can downsize and free up housing stock for the next generation of buyers and rid themselves of the administrative and physical burden of owning a house. It also offers increased flexibility in terms of the different levels of support and provision required to live longer lives in safe, thoughtfully designed communities."
"Since its launch in 2013, we have diversified the M&G UK Residential Property Fund's investment strategy so we are able to cater for each of the key life stages ranging from student accommodation through to retirement. We very much look forward to developing our partnership with Birchgrove and Bridges in the next stages of the Fund's evolution," he added.