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Audience

M&G Secured Property Income Fund

The M&G Secured Property Income Fund’s (SPIF) current mid to long-term anticipated total gross return is 4% above UK inflation. The fund offers a diversified portfolio of UK real estate assets, let to predominantly high quality tenants on long-term, inflation-linked leases. SPIF was launched in 2007 and is the largest long lease real estate fund in the UK with a NAV of over £3.2bn*.

We follow a relative value strategy that combines analysis of tenant credit quality with our real estate expertise, supported by our large pool of fixed income and real estate resources. This provides investors with long-term, liability-matching cashflows, whilst benefitting from the security of owning real estate assets that have the potential for capital growth.

Key features

  • Anticipated medium to long-term total gross return of 4% above UK inflation
  • Inflation-linked income
  • Long term investments
  • Security from predominantly investment grade tenants
  • Security from ownership of key operating assets
  • Capital growth potential from underlying real estate
  • Relatively low volatility of returns versus traditional real estate
  • Quarterly cash distributions (option to reinvest)

A typical transaction

A typical transaction of the M&G Secured Property Income Fund consists of the following:

  • A sale and leaseback with a UK corporate entity (the tenant)
  • The tenant has a contractual obligation to meet rental payments over a fixed lease term
  • A lease term of 25 years or more with annual reviews in line with UK inflation
  • Continual analysis of the tenant by our in-house credit resources
  • On-going assessment of the properties by our experienced real estate team

Who should invest?

  • Investors with long-dated, inflation-linked liabilities requiring index-linked cashflows
  • Investors seeking positive real income and capital gains
  • Fixed Income investors prepared to exchange some liquidity for higher returns and more security than typical corporate bond investments
  • Real Estate investors looking for a lower risk, lower volatility alternative to traditional balanced property funds

* As at 31 March 2016.