M&G Real Estate has continued to consolidate its exposure to the “defensive French food sector” with a €32 mln acquisition of a Géant Casino hypermarket in Toulouse, which is fully leased to major French retailer, Casino Group.
It is M&G’s fifth Géant Casino hypermarket acquisition in France and the second on behalf of the M&G European Secured Property Income Fund, following an acquisition in Mandelieu-la-Napoule in 2021.
The fund is looking for long term total returns for pension funds and institutional investors with secure, inflation-protected income through long-term leases to tenants with strong credit credentials.
Located in a popular retail area, the 14,000 m2 property is alongside the main access route into Toulouse city centre, next to two retail parks, a cinema and an adjacent shopping mall, which is home to 140 domestic and international brands.
Lee McDowell, manager of the M&G European Secured Property Income Fund, expects high quality food stores with defensive lease structures to continue to perform well. ‘In the wider economic context, long lease property strategies with predictable, long-term cash flows and direct inflation linkage, should be particularly well positioned to capture the potential upside of higher inflation.’
Antonin Prade also talked up the prospects of such an investment in an inflationary environment.
The investment director for France and European long income said: ‘In an inflationary environment, long leased, well-located, food-anchored stores show an even greater protection of income and capital. Moreover, our strong landlord/tenant partnership with Géant Casino will further strengthen the portfolio’s ESG profile.’
The M&G European Secured Property Income Fund has grown to circa €700 mln as at May 2022 and is invested in ten Continental European markets.
