M&G Real Estate, one of the UK’s largest property investors, bought and sold £4.2 billion of real estate in 2015, taking the total level of transactions to over £11 billion over the past three years. The 2015 total included £2.6 billion of new acquisitions.
Notable UK deals included the acquisitions of Bloomberg Place in London and Bedfont Lakes Office Park near Heathrow Airport, along with a framework deal signed with Crest Nicholson, the first agreement of its kind between an institutional investor and a housebuilder that will create a meaningful increase in housing output. Over the course of the year M&G Real Estate also made over £500 million of investment into the Northern Powerhouse cities.
Chief Executive Alex Jeffrey explains: “In the UK in 2015 we were again one of the most active participants, being involved in 5% of all deal flow. This is a great testament to our team which has built a market-leading reputation for origination and reliable execution. Our unique ability to participate in the full spectrum of real estate – from equity through debt and in a range of asset classes – means we are ideally placed to find the best relative value opportunities in line with client needs.”
Internationally, highlights included the €175 million purchase of an office block in Madrid, M&G Real Estate’s first acquisition in Italy for ten years and a US$230 million deal to acquire three retail assets in South Korea.
M&G Real Estate continues to focus on the recovery in Continental Europe, as the region follows the US and the UK into a phase of solid economic growth.
“Bolstering our investment capability and further strengthening our continental European business is a key priority for 2016. We are expanding our continental European footprint and our team, and will announce new office openings and appointments early in the year”, says Alex.
Turning to the Asia-Pacific region, where M&G Real Estate has offices in Singapore, Tokyo and Seoul, he maintains that the maturity, liquidity and the diversification benefits of Asian real estate will remain of great appeal to investors interested in strong, sustainable income streams from Asia-Pacific’s growing universe of prime real estate in the developed markets in the region.
Concluding, Alex says: “The value of timing and of taking a measured approach is particularly important at this point in the property cycle as we still face buoyant investor demand alongside expectations that global real estate returns will moderate. With a stable economy in the UK, improved business and consumer confidence and relatively limited supply, rental growth is set to be the major theme for 2016.
“Nonetheless, especially given increased volatility in global capital markets and macro-economic challenges, downside risk protection will be fundamental. Our strategic focus remains on long-term income driven investment, enhancing our position as a partner and co-investor of choice for institutional investors seeking exposure to high quality real estate and sizeable assets.”