M&G Investments has spent £92m (€111.6m) on a portfolio of leisure properties in the UK as it steps up investment in low-geared rent deals.

M&G’s Secure Property Income Fund provided the capital for the sale and leaseback deal with Bannatyne’s Health Clubs.

The fund, which invests in supermarkets, hotels, offices, student accommodation and residential, has bought 39 ground leases – 26 freehold and 13 long leasehold.

M&G said the deal was a quasi-ground lease arrangement, where the initial rent is set at a low percentage of market rental value.

“A deal structured in this way minimises the risk of the rent becoming unaffordable for the tenant,” M&G said.

The sites are leased to Bannatyne Fitness for 125 years on a full repairing and insuring basis, with contracted annual reviews linked to inflation.

Around £700m was invested by the same fund in 2013.

The fund took part in the £240m purchase of a portfolio of 18 UK car auction sites alongside a second M&G fund.

The Secure Property Income vehicle is also funding the construction of a new headquarters in Glasgow for Scottish Power.

Although dominated by retail real estate, the fund’s portfolio includes 31.2% of investment outside of office and retail, as of September last year.