Investments has bought a UK hotel development for its long-lease fund.
The freehold of the redundant office asset, at 21 Tothill Street in London, was bought by the firm.
M&G Investments will fund the development of a 339-room 鈥渉ub by Premier Inn鈥�, with completion due this year.
The manager bought the asset, in Westminster, for its 拢3.3bn long-lease M&G Secured Property Income Fund.
Ben Jones, manager of the fund, said: 鈥淭his investment will provide our clients with a high quality, inflation-linked cash flow.
鈥淭he forecast returns are well supported by the prime, central location of the asset, underpinning the long-term value of the investment.鈥�
Pension funds and insurance companies, he said, continue to look for secure long-term investments to match their liabilities.
鈥淲e are confident that this property will deliver on that requirement. London is one of the world鈥檚 leading tourist and business destinations with a strong demand for budget hotels.鈥�
The property will be let to Premier Inn on a 25-year lease with five-yearly rent reviews.
