British insurer and asset manager M&G has acquired a majority stake in European property investor BauMont, as it prepares to buy more commercial real estate in anticipation of a market recovery.
M&G told Reuters it had acquired a 65% stake in BauMont Real Estate Capital, an 18-person real estate investment team with offices in London and Paris and managing €1.5 billion (1, 6 billion dollars) in assets.
London-headquartered M&G has the option to acquire all of BauMont over the next few years, the group said, adding that it had invested 200 million euros in BauMont's latest property fund, which will target properties such as offices, rental housing and logistics.
M&G declined to disclose the financial terms of the deal.
Commercial real estate markets have been disrupted around the world by rising borrowing costs and office vacancies following the pandemic, although there are growing signs the market may have reached its peak. lowest level in some countries, including Britain.
Joseph Pinto, chief executive of M&G Asset Management, said the deal would help the company grow its property business internationally and support its wider private markets arm, which oversees £73 billion (£95 billion). dollars) of assets.
“It is important to internationalize even more, it is essential,” Mr Pinto told Reuters.
BauMont, founded in 2017, owns a range of commercial properties in Britain and France. He specializes in “value-add” 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 purchased an office building in the City of London that it will seek to upgrade, Tony Brown, global head of M&G Real Estate, told Reuters.
“European real estate markets are adapting to the higher rate environment and entering a new growth cycle,” BauMont managing partner Robert Balick said in a statement.
BauMont will invest independently of M&G, but will have access to its support functions, M&G said.
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