M&G Real Estate launches long income property fund
M&G Real Estate today launched a long income property fund offering exposure to UK real estate backed by long-term rental contracts. The fund targets optimised investment returns by combining systematic analysis of tenant credit quality with real estate fundamentals.
M&G Real Estate said the fund provides investors with access to long-term, predictable cash flows through inflation-linked rental income streams from high-quality tenants. The portfolio is backed by a diversified pool of UK real estate assets, spreading exposure across multiple properties and occupiers.
The underlying portfolio currently has 100% occupancy, with full rent collection reported across its assets. M&G Real Estate added that the vehicle has no gearing and carries no development risk, focusing instead on stabilised, income-producing properties.
The fund holds individual assets across 34 separate holdings, providing granular exposure to different properties and locations. These assets are let to 22 tenants, offering diversification by counterparty across the income stream.
M&G Real Estate reported that 92.0% of the fund’s income is subject to contractual inflation-linked rental increases, providing a direct link between income growth and inflation measures. The remaining 8.0% of income is subject to fixed percentage rental uplifts, averaging 2.5% per year over the term of the leases.
