Business
M&G buys stake in European property firm as it bets on turnaround
Global Banking & Finance Review®
Company
By Iain Withers
LONDON (Reuters) – British insurer and asset manager M&G has bought a majority stake in European real estate investor BauMont, as it prepares to buy up more commercial property in anticipation of a market recovery.
M&G told Reuters it had acquired a 65% stake in BauMont Real Estate Capital, an 18-strong property investing team with offices in London and Paris and 1.5 billion euros ($1.6 billion) of assets under management.
London-based M&G has the option to fully acquire BauMont in the next few years, it said, adding it had invested 200 million euros in BauMont’s latest real estate fund, which will target properties including offices, rental homes and logistics.
M&G declined to disclose the financial terms of the deal.
Commercial property markets globally have been roiled by higher borrowing costs and emptier post-pandemic offices, although there are growing signs the market may have bottomed out in some countries, including Britain.
M&G Asset Management Chief Executive Joseph Pinto said the deal would help the company expand its real estate business internationally and bolster its broader private markets arm, which oversees 73 billion pounds ($95 billion) of assets.
“It is important to internationalise even more, that’s critical,” Pinto told Reuters.
BauMont, founded in 2017, owns a range of commercial properties in Britain and France. It specialises in ‘value-added’ strategies, taking on slightly riskier assets that sometimes require redevelopment to make them attractive to tenants or buyers.
BauMont will likely “selectively” buy offices in London and Paris and recently bought an office building in the City of London that it will look to modernise, Tony Brown, Global Head of M&G Real Estate, told Reuters.
European real estate markets are adjusting to the higher rate environment and are entering a new cycle of growth,” Robert Balick, managing partner at BauMont, said in a statement.
BauMont will invest independently of M&G, but will have access to its support functions, M&G said.
($1 = 0.9190 euros)
($1 = 0.7717 pounds)
(Reporting by Iain Withers; Editing by Mike Harrison)
Asset management is the process of developing, operating, maintaining, and selling assets in a cost-effective manner. It involves managing investments on behalf of clients to achieve specific financial goals.
Real estate investment involves purchasing, owning, managing, renting, or selling real estate for profit. It can include residential, commercial, and industrial properties.
Market recovery refers to the process by which an economy or market rebounds after a downturn. It typically involves an increase in economic activity, asset values, and investor confidence.
A majority stake refers to owning more than 50% of a company's shares, giving the owner significant control over the company's decisions and operations.
Value-added strategies in real estate involve acquiring properties that require improvements or redevelopment to increase their value and attract tenants or buyers.
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