M&G Real Estate has completed an initial close of its first value-add fund – the M&G UK Enhanced Value Fund (UKEV) – with investor commitments totalling £125m.
Managed by Paul Crosbie (pictured), UKEV is a seven-year, closed-ended fund aimed at institutional investors in the UK, Europe, Asia Pacific and Canada. Initial funding includes a significant commitment from an Asian investor and a total of £500m is expected to be fully invested by 2021.
Investing in core, supply-constrained locations such as London, the South East and the big six UK office markets, UKEV will target mispriced assets valued at £15-75m, taking advantage of the risk aversion created by current political uncertainty. Value will be added by repositioning and redeveloping assets and by exercising change of use and lease enhancement methods.
Crosbie said: “Despite the uncertainty surrounding the outcome of Brexit, the UK’s economic and market fundamentals remain robust. UK commercial real estate continues to benefit from significant macro trends such as e-commerce and urbanisation, which are driving tenant demand.
“While the supply of quality space remains severely limited, we believe this creates an exciting window of opportunity to refurbish and reposition assets.”
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