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M&G buys four Euro commercial RE buildings for €190m

The London-based investment arm of Prudential has made its first acquisitions since gating its open-ended retail UK property fund following the outcome of the EU referendum result.

M&G Real Estate, the investment arm of pension fund Prudential, has acquired three European office assets and a retail property for a combined price of €190 million.

The assets are located in Paris, Barcelona and Copenhagen and were purchased using capital from the real estate fund manager’s M&G’s Core European Property Strategy, an investment vehicle managed by partners David Jackson and Simon Ellis.

The first acquisition was a 50,000 square foot building in Paris’s prime central business district costing €48 million, it is fully let to Condé Nast publishing group on a long-term lease. The firm also purchased the 84,500 square foot NAO Building, in Barcelona, which was acquired for €30 million. It is located at the heart of the city’s innovation district 22@ district and fully let to the state employment office and Novo Lottery. The third office asset picked up by M&G was the 132,000 square foot Kalvebod Brygge building (pictured), which overlooks Copenhagen’s harbour, for €82 million. The asset is fully let to financial services group Nykredit.

The final property in the transaction is the 19,000 square foot high street building Vimmelskaftet which was acquired for €29 million. It is home to the city’s new Zara flagship store and is located next to an existing M&G Real Estate-owned retail asset that the fund manager acquired in 2015 for €33 million.

“These deals are aligned with our strategy to acquire prime assets in core locations across Europe. Investor appetite for prime offices and retail in these locations remains strong as rental growth continues, driving long-term income prospects,” said Ellis. “We have successfully raised significant capital in 2015 and 2016, and deployed it across several jurisdictions and asset classes, providing further diversification for our investors. With further capital to deploy, we will continue to target core locations in major European cities,” he added.

The quartet of acquisitions follow a €164 million deal for a portfolio of Portuguese supermarkets, announced in February, the deal was M&G’s first foray into the country’s real estate market. Since March 2015, the business has deployed around €663 million of capital across the continent with purchases made in Italy, Spain, Denmark, Germany, Portugal and France.

In July, following the European Union referendum result in the UK, M&G became the third firm to suspend trading in one of its open-ended real estate vehicles after a run of redemptions from jittery investors.