UBS makes £241m close on real estate debt fund
UBS Asset Management has made a final £241m close of its latest real estate debt fund.
The UBS Participating Real Estate Mortgage Fund was launched in December 2013 and is run by UBS and Mitsubishi Corporation as co-general partners. It has been backed by nine investors from the Netherlands, Germany, Japan and the UK. It will provide whole loans and expects to deliver IRRs of between 8% and 10%.
Anthony Shayle, head of global real estate – UK debt at UBS AM, said: “When we launched in 2013, our target returns were possibly looking a little cheap. Today they are looking fair for the market, which is a reflection of the evolution of the market over the last two years.”
UBS Asset Management has made a final £241m close of its latest real estate debt fund.
The UBS Participating Real Estate Mortgage Fund was launched in December 2013 and is run by UBS and Mitsubishi Corporation as co-general partners. It has been backed by nine investors from the Netherlands, Germany, Japan and the UK. It will provide whole loans and expects to deliver IRRs of between 8% and 10%.
Anthony Shayle, head of global real estate – UK debt at UBS AM, said: “When we launched in 2013, our target returns were possibly looking a little cheap. Today they are looking fair for the market, which is a reflection of the evolution of the market over the last two years.”
In addition to acquisition finance, the fund will also target refinancing requirements and development projects across all asset classes including alternatives. The fund will target an average 75% loan-to-value, a little lower than many mezzanine funds, and with average lot sizes between £10m and £40m. To date, the fund has made a total of £123m of loans across nine facilities and 23 assets.
With development finance, Shayle believes the company will add value in a market in which banks traditionally remain conservative. “We have done residential development, office development across a variety of different parts of the UK, and we have got a development loan out on a hotel,” Shayle said, adding that in some cases the banks’ requirement for extensive prelet is waived.
mike.cobb@estatesgazette.com
