Mitsubishi and UBS launch UK real estate debt fund

08 January 2014   Category: News, Asia, Japan, United Kingdom   By Maya Ando

Mitsubishi Corporation (MC) has announced the launch of a new real estate debt fund focused on the UK market, which is managed by a joint venture between MC Asset Management Europe (MCAME) – a 100% subsidiary of MC – and UBS Global Asset Management (UBS GAM), a fully-owned subsidiary of UBS AG (UBS). Including the £50 million (US$81.97 million) seed capital from MC, the fund’s first close was £140 million.

The fund is a closed ended debt fund seeking to take advantage of the debt-financing gap in commercial real estate in the UK. It will target a wide range of potential borrowers including those needing to refinance their maturing loans and new borrowers seeking to invest in the UK commercial property market. The UK’s real estate debt market has an established reputation in terms of transparency, liquidity and its lender-friendly legal system.

MC and UBS established their first joint venture in 2000 – MC-UBS Realty Management in Japan – which now manages the second largest REIT in Japan. The new fund project is backed by this longstanding successful relationship between the two firms, which are now looking to expand the scope of their cooperation on a more global scale. Both MCAME and UBS GAM intend to grow the fund with investors from around the world – the target fund size is £500 million.