M&G has announced the successful issuance of a €500 million first green bond by its €5.4 billion M&G European Property Fund. The five-year financing attracted peak orders exceeding €2.1 billion from more than 120 investors and was 2.8 times oversubscribed at final pricing.
Key Overview
- M&G European Property Fund issued its first €500 million green bond.
- The €5.4 billion Fund has €2.4 billion of assets currently eligible under its Green Finance Framework.
- Peak orders exceeded €2.1 billion from more than 120 investors.
- The issuance was 2.8 times oversubscribed at final pricing.
- The Fund secured five-year financing at a 100-basis-point margin.
- Proceeds will support new investments and eligible green projects.
- The Fund has committed to more than €1 billion of acquisitions across 11 transactions over the past 12 months.
M&G European Property Fund Secures €500 Million Green Bond
M&G has announced the successful issuance of a €500 million first green bond by its €5.4 billion M&G European Property Fund.
The transaction provides the Fund with additional capacity for investment, acquisitions and refinancing, while reflecting its sustainability credentials.
The Fund currently has €2.4 billion of assets eligible under its Green Finance Framework.
M&G European Property Fund is the company’s flagship Continental European core diversified real estate strategy. It invests across the offices, logistics, retail and living sectors and has been investing in high-quality assets across 12 European markets for 20 years.
The Fund focuses on delivering long-term value for investors while continuing to invest in real estate with sustainability credentials.
Strong Investor Demand for Green Bond
The green bond attracted strong demand from a broad international investor base.
Peak orders exceeded €2.1 billion from more than 120 investors. At final pricing, the issuance was 2.8X oversubscribed, allowing the Fund to secure five-year financing terms at a margin of 100 basis points.
M&G said the demand demonstrates investor confidence in the Fund’s strategy and the long-term opportunities across European real estate.
The Fund’s sustainability credentials have also received independent recognition. Its Green Finance Framework received an ‘Excellent’ assessment from Sustainable Fitch, while the Fund has an ‘A-‘ Issuer Default Rating from Fitch Ratings.
Green Bond to Support Investment and Eligible Projects
Proceeds from the green bond will be used to fund new investment opportunities and eligible green projects.
The financing is intended to enhance the sustainability, efficiency and long-term value of the Fund’s portfolio while providing additional capacity at an attractive point in the real estate cycle.
Over the past 12 months, the Fund has committed to more than €1 billion of acquisitions across 11 transactions, largely in the logistics and living sectors.
Alongside acquisitions, the Fund continues to enhance the performance and resilience of its existing assets through active asset management.
M&G said strong demand for high-quality space and limited new supply in many markets continues to generate opportunities for attractive long-term returns for investors.
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Fund Marks 20 Years of European Real Estate Investment
The green bond comes as the M&G European Property Fund approaches its 20th anniversary.
The Fund has built a diversified portfolio across 12 European markets, investing across offices, logistics, retail and living.
Simon Ellis, Fund Manager of M&G European Property Fund, said:
“The green bond marks an important milestone for the Fund as we approach its 20th anniversary. It reflects the scale, diversification and quality of the portfolio as well as our long-term strategy to invest in real estate with leading sustainability credentials.”
He added that the additional financial capacity supports the Fund’s ambition to build on more than €1 billion of acquisitions completed over the past 12 months.
New Source of Long-Term Funding
The transaction also establishes a new source of long-term funding for the Fund.
Sally Hurst, Director, Debt Strategy & Origination at M&G Real Estate, said:
“This successful debut bond issuance establishes an important new source of long-term funding for the Fund and broadens its financing options for the future.”
She added that the scale of demand from institutional investors and the competitive terms achieved demonstrate the Fund’s ability to access debt capital markets efficiently and create a foundation for future issuance.
Outlook
The €500 million green bond gives the M&G European Property Fund additional financing capacity for investment, acquisitions and refinancing.
With €2.4 billion of assets currently eligible under its Green Finance Framework, the Fund has a substantial pool of assets linked to its green financing approach. The bond proceeds will support eligible green projects and new investment opportunities while the Fund continues active management of its existing portfolio.
The Fund has also committed to more than €1 billion of acquisitions across 11 transactions over the past 12 months, primarily in logistics and living. Its latest financing provides another source of long-term funding as it continues its European real estate strategy.
FAQs
1. How much did the M&G European Property Fund raise through the green bond?
The Fund issued its first €500 million green bond, providing additional capacity for investment, acquisitions and refinancing.
2. How much investor demand did the green bond attract?
Peak orders exceeded €2.1 billion from more than 120 investors, while the final issuance was 2.8 times oversubscribed.
3. What will the green bond proceeds be used for?
The proceeds will fund new investment opportunities and eligible green projects, supporting the sustainability, efficiency and long-term value of the portfolio.
4. What is the size and scope of the M&G European Property Fund?
The Fund has €5.4 billion in assets and invests across offices, logistics, retail and living sectors in 12 European markets.
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