M&G Real Estate has hired Antonin Prade from Aberdeen Standard Investments, as it looks to expand its long-income investment platform in Europe.
Prade, who was manager of the European Secure Income Fund, will identify new investment opportunities for the M&G European Secured Property Income Fund (Euro SPIF), which launched in 2015.
M&G runs the largest long-lease fund in the UK – the £3.6bn (€4bn) SPIF – and has ambitions to replicate its UK long-lease and income-strip strategies in continental Europe.
Matthew Stone, who leads M&G Real Estate’s pan-European long-income team, told IPE Real Assets that continental European could support the growth of the market for long-lease strategies.
He said that the commonly held perception that continental leases were shorter than those in the UK was unfounded. The weighted average unexpired lease term (WAULT) of Euro SPIF is in fact longer than its UK counterpart, at 40 years versus 32.
Stone also said the market for income strips – amortising leases that can be bought to generate inflation-linked rental cashflows and where the asset ownership transfers back to the tenant at the expiry of the lease – could become significant over time.
M&G already pursues this strategy in the UK through its Secured Lease Income Fund (SLIF), but Stone said this could be rolled out on the continent.
If Europe could emulate the huge ‘credit-tenant market’ in the US, it could become similarly sizeable, he said.