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Audience

Long lease

M&G has been generating attractive, long-dated income from long-term leases for our external clients for a decade - and for internal clients since 1999.

Since its launch in 2007, our flagship long income strategy has established an enviable track record, effectively capturing the illiquidity premium that long lease income transactions can offer over investment grade corporate bond yields.

Today, we manage over £8bn* in assets under management across a number of strategies, seeking to deliver well diversified returns from long lease real estate throughout the UK and Europe.

Scroll down to learn more about long lease investing at M&G and how these structures can deliver a range of investment outcomes for institutional portfolios.

* M&G Investments, 31 December 2018

The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.

Where past performance is referenced, please note that this is not a guide to future performance.

Portfolio highlights

Since 1999, M&G has continued to expand its portfolio of long lease real estate assets across the UK and, more recently, Europe. The map below illustrates the breadth of our exposure in both geographic and sector terms.

Click on the locations to learn more about our key assets.

Find out more about our requirements when we invest in property.

Disclaimer: Some of these investments may be in funds not registered in your jurisdiction.

The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.

Where past performance is referenced, please note that this is not a guide to future performance.

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Generating long income from real estate

Long lease assets blend elements of fixed income and real estate investing with the aim of delivering stable, long-dated cashflows from occupational leases that are well aligned to the needs of long-term investors.

Ben Jones, Head of Real Estate Income, highlights how our long-standing experience, expertise and presence in European fixed income and real estate markets means we are uniquely placed to exploit the growing opportunity set in the UK and Europe.

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Three long lease structures

Long lease transactions typically adopt one of three structures, each with slightly different investment characteristics. Taken together, they increase the range of investment outcomes that long lease investing can deliver.

In the videos below, fund managers from our Long Lease Real Estate team explain the salient investment characteristics of each structure.

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Sale and leaseback

Sale and leaseback structures form the foundation of all long lease deals and are probably the most well-known form of long lease real estate investment.


Peter Riley explains how these structures are mutually beneficial for investors and owner / occupiers before examining how investors stand to gain from capital growth as well as long income.



Income strips

Peter Manners-Smith discusses how the traditional sale and leaseback structure, outlined in the previous video, can be adjusted to separate out the cashflows generated by the asset over the lease period.


Cashflows are secured by the property in the event of default but real estate value risk decreases over time, making it easier to value for liability matching purposes.


Ground rents

Ground rents are effectively a very long-term sale and leaseback, with lease terms often in excess of 100 years.


Holly Johnstone explains how lower rent levels combined with very long lease terms can translate into enhanced security, minimising tenant default and real estate exposure.





Our expertise

Combining two core skill sets: fixed income and real estate

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For further information about long lease real estate investing, please contact us at institutional.clients@mandg.co.uk.

The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.

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For institutional investors only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website.