M&G Real Estate today confirmed it has completed on a £198 million (approx. € 234.4 million) off-market retail asset swap with BP Pension Fund on behalf of the M&G Property Portfolio.
Under the terms of the deal M&G Real Estate has acquired two dominant retail parks for £123 million (approx. €145.6 million) - Riverside Retail Park in Northampton and Wycombe Retail Park – in exchange for its interests in the Tesco Extra on Honeywood Parkway in Dover and a Debenhams store in Taunton for a combined valuation of £75 million (approx. €88.8 million). M&G Real Estate is also making balancing cash payment of £48 million net of costs.
The £2.21 billion (approx. €2.62 billion) M&G Property Portfolio, is a pure bricks and mortar fund, which invests in UK commercial property and is aimed at private investors. It is managed by Fiona Rowley and Justin Upton of M&G Real Estate.
Deputy Fund Manager, Justin Upton, comments: “This transaction is typical of the innovative approach the Fund is taking to acquire high quality assets in a restricted market characterised by low stock volumes. These well located retail parks provide secure income returns and good asset management potential. By offering the BP Pension Fund this particular solution to cash re-investment risk, we were able to structure a mutually beneficial deal and remain substantial net cash investors ourselves.
“The ability to transact a deal of this size off-market with BP is a testament to the on-going relationship between our two firms.”
Jones Lang LaSalle represented M&G Real Estate. Edgerley Simpson Howe represented the BP Pension Fund.