M&G Investments acquires €220m bingo hall portfolio in the UK

M&G Investments has acquired a portfolio of 47 bingo clubs in the UK for just over £173 mln (€220 mln) in a sale-and-leaseback deal with Gala Leisure. The transaction represents a net initial yield of 8.46%.

The portfolio is let to Gala, the UK’s largest bingo operator, for 25 years on a full repairing and insuring basis at an initial rent of £15.5 mln with annual reviews linked to inflation.

The deal represents over 40% of Gala’s 127 clubs in the UK. The majority (36) of the sites are freehold while the remaining 16 are leasehold. Most of the clubs are purpose-built or conversions and 12 are 'heritage clubs', which are usually converted town halls or cinemas.

The capital is being provided by the £2.5 bn M&G Secured Property Income Fund, which invests in and develops a wide range of real estate, such as supermarkets, hotels, offices, student accommodation and residential buildings. These properties are leased to tenants over the long term and provide M&G’s institutional pension fund investors with bond-like returns linked to inflation.

M&G was advised by M&G Real Estate which in turn was advised by CBRE.

'This is a significant investment in a portfolio of key operating assets of a market leader in the leisure industry,' said Ben Jones, manager of the M&G Secured Property Income Fund. 'This transaction offers a bond-like, growing income over the long term that our many pension fund clients continue to seek.'