M&G Real Estate’s Value Add Fund makes maiden acquisitions across industrial and office markets

M&G Real Estate has deployed circa £50 million for its first acquisitions on behalf of the M&G UK Enhanced Value Fund, which completed its initial close in February this year. Managed by Paul Crosbie, the Fund invests in mispriced assets in the UK, taking advantage of the risk aversion created by current political uncertainty.

The first transactions include two off market office acquisitions in the south east alongside an industrial portfolio spread across the Midlands and the north west, supporting the Fund’s strategic macro investment themes of urbanisation, regeneration and connectivity.

Charter Court in Slough is a 45,750 sq ft office asset close to the town centre amenities and railway station, which is set to benefit from a significant regeneration programme and improved rail links on completion of Crossrail in 2019. The purchase price of £13m reflects a capital value of £290 psf.

In Watford, Radius House – a 41,250 sq ft office has been purchased for £15 million at a capital value of £360 psf. Located on Clarendon Road, it is within walking distance from Watford Junction station and the Harlequin shopping centre. Slough and Watford are currently benefitting from public and private investment led regeneration, which will continue to drive tenant demand in both locations.

The Fund has also acquired Aviva’s Pebble portfolio of five mid-size logistics assets for £22 million – at a net initial yield of circa 6% and a value of £70 psf – as it looks to target modern, single let logistics assets near major conurbations and hubs.

Paul Crosbie comments: “Securing our first office deals off market reflects our ability to identify and source opportunities and our strong understanding of the occupational markets enables us to make targeted acquisitions. The fundamental lack of supply in these locations gives us the confidence to target assets that will benefit from active asset management and capital expenditure to improve income profiles and enhance capital values.”