UBS Asset Management has made a £241m final 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. 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%.
“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 past two years,” said Anthony Shayle, head of global real estate – UK debt at UBS Asset Management.
In addition to acquisition finance, the fund will also target refinancing requirements and development projects across all asset classes, including alternatives. It will target an average loan-to-value ratio of 75%, a little lower than many mezzanine funds, and 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.
