M&G Real Estate has invested €124m to buy two retail stores in France on behalf of two of its European property funds.
The manager, investing on behalf of M&G European Property Fund and M&G European Secured Property Income Fund, has bought the hypermarkets leased to food retailer Casino Group.
The acquired assets are the Géant Casino hypermarket of La Valentine, located in Marseille, and the Géant Casino hypermarket located in Mandelieu-la-Napoule.
Antonin Prade, director of investments for M&G Real Estate in France, said the French food market has remained resilient throughout the Covid-19 pandemic, with overall supermarket sales growing by more than 5% in 2020.
“In this context, we consider well established, strategically located, food-anchored hypermarkets as a defensive asset class consistent with our core strategy.
”On top of this security, the excellent relationship that we built with a high-quality tenant and partner such as Casino Group will be key to guarantee future rental income but also to improve the ESG credentials of the properties purchased, and therefore secure their value in the long run.”
Marc Reijnen, the head of investments and asset management for M&G in continental Europe, said grocery real estate has proven to be among the most stable commercial real estate asset classes in Europe over the past few decades, and ”despite an uncertain economic environment, the medium-term outlook on yields for high-quality stock with consistent income remains solid across Europe”.
“In this context, we consider these acquisitions to offer an appealing discount to very sought sectors like logistics and will help the respective funds’ performances.
”Given their size and liquidity, both funds will continue to increase their exposure to France - one of the Funds’ primary target countries - not only through the food sector, but also through the living, logistics and office sectors, providing further geographic and tenant diversification to our portfolios.”
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