M&G Real Estate and SWIP agree £53 million asset swap (UK)

M&G Real Estate and Scottish Widows Investment Partnership (SWIP) today confirm the completion of a £53 million (approx. €62.5 million) off market asset swap between the M&G Property Portfolio and St Andrews Life Assurance plc.

Under the terms of the deal M&G Real Estate acquires two assets for a combined valuation of £32 million. The first is a prime retail warehouse let to Wickes on Woodbridge Road in Guildford; the second is a modern distribution center on Orion Boulevard in Warrington let to Royal Mail.

In exchange, the St Andrews Life Assurance plc acquires a Travelodge in Micklegate, York, Nuffield Health & Fitness in West Byfleet and a portfolio of ground leases in East Tullos, Aberdeen for approximately £21 million. M&G Real Estate will also make a balancing cash payment of £12 million including costs.

This is the second swap deal transacted by the M&G Property Portfolio in two months and accounts for £250 million across eight assets. The Fund’s total acquisitions this year to date stand at £385 million.

The £2.3 billion M&G Property Portfolio is a 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.

Justin Upton comments: “This transaction reflects our strategy to acquire high quality off market assets in dominant locations. Both properties provide the Fund with a core income stream and fixed uplifts. The market continues to be characterized by restricted stock levels and the ability to transact with SWIP on a swap plus cash basis allowed both parties to realize their respective investment requirements and minimize cash drag. This is the second swap transaction the Fund has undertaken over the summer and reinforces our commitment to being net investors via innovative investment solutions.”

Calum Bruce of SWIP’s UK Institutional team comments: “This transaction illustrates the innovative and creative approach SWIP takes to managing the Fund and has given it access to assets, which might not otherwise have been available on the open market. The incoming properties ideally fit the Fund’s strategy to acquire well let properties in strong markets and the cash payment will allow further investment in quality real estate to further enhance the portfolio.”

M&G Real Estate was un-represented. Joiner Cummings acted for SWIP.


Source: Quill PR

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