M&G Real Estate has completed on a GBP198m 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 GBP123m – 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 GBP75m. M&G Real Estate is also making balancing cash payment of GBP48m net of costs.
The GBP2.21bn 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.
Upton says: “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.