M&G bags £115m Welsh outlet center

The real estate fund manager has acquired the Bridgend Designer Outlet from TH Real Estate in a deal reflecting a net initial yield of 5.75 percent.

M&G Real Estate, the real estate arm of UK investment fund manager M&G Investments, has purchased a Welsh outlet center for £115.5 million (164 million; $174 million) from the London-based real estate asset management firm TH Real Estate. The acquisition price reflects a net initial yield of 5.75 per cent.

The 244,080 square foot Bridgend Designer Outlet houses designer and high street fashion tenants as well as a cinema and a range of restaurants and cafes at a rent of around £7 million per annum.

“Bridgend Designer Outlet has benefitted from 5 percent year-on-year turnover growth during the last five years and, as a result, rental growth is set to continue rising, aided by significant levels of inward investment into the region,” commented M&G Real Estate fund manager, Fiona Rowley.

“This fully supports our strategy for acquiring prime retail assets in strategic locations to provide our investors with long-term income growth revenue.”

Outlet mall company McArthurGlen will continue to manage the center which is located just two miles north of Bridgend town centre, mid-way between Cardiff and Swansea.

“Bridgend has witnessed substantial population growth of over eight per cent in the past decade, which was the second largest rise in Wales,” added Rowley. “It is also strategically located to capitalise on both Cardiff and Swansea’s economic strength as well as the Welsh capital’s 18 million annual tourists.”

M&G Real Estate is one of the world’s largest international property investors, with £21.2 billion of assets invested across North America, the UK, Europe and Asia. It offers institutional investors open-ended pooled funds, as well as segregated mandates with a focus on generating long-term income-driven returns.