M&G Real Estate makes first retail acquisition in South Korea

• Single largest acquisition worth $US 230 million diversifies Asia property strategy
• Builds on M&G Real Estate’s successful track record of investing in South Korea

LONDON/SINGAPORE, 11 August 2015 – M&G Real Estate, the real estate fund management arm of M&G Investments, has acquired three retail assets in South Korea at a combined value of US$230 million, representing an average yield of 6.5%. The acquisition was made on behalf of its core Asia real estate strategy, managed by Singapore-based Erle Spratt.

Under the terms of the deal, M&G Real Estate has acquired two hypermarkets: the first in Daejeon, South Korea’s fifth largest city; the second in Jeju, the capital of the Jeju Province and the nation’s premier tourist destination. The third asset is an outlet mall in Incheon City, the country’s third largest city after Seoul and Busan. All three assets are highly sought after retail space in prime locations and are leased to South Korea’s largest retailer, Lotte Shopping.

Erle Spratt says: “South Korea is a key market for us and we are building on our successful 10-year track record of delivering investment performance in Asia. We’re seeing strong capital flows, particularly from global pension funds and insurance companies in Asia as well as the UK and Europe. With responsibility for more than US$2 billion in assets, we are well positioned to pursue property investments across the region to further improve our risk adjusted returns and sustain the outperformance of our portfolio.”

Hyesik Ryu, Managing Director, M&G Real Estate Korea, adds: “We were one of the first non-domestic institutional investors to invest in South Korea when we bought into the country’s commercial office sector in 2004. M&G Real Estate has developed a deep understanding of the market, enabling us to make this latest investment in the retail sector, which will strengthen the strategy’s long term income stream.”

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