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 £125 million. Managed by Paul Crosbie, UKEV is a seven-year, close-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 £500 million 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 between £15-75 million, 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.
Fund Manager Paul Crosbie, explains: “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. Whilst the supply of quality space remains severely limited, we believe this creates an exciting window of opportunity to refurbish and reposition assets.
“We are excited by the commitment already shown by investors and look forward to drawing on our deep pool of knowledge and expertise within the UK to provide returns with the exciting pipeline that we have for this strategy.”
Alex Jeffrey, Chief Executive, M&G Real Estate, adds: “With our market-wide credentials and expertise, we are well positioned to capitalise on long term investment opportunities available across the UK. To exceed our target first close in such a short space of time is credit to the team.
“We remain committed to growing our range of real estate products and solutions to meet the needs of investors.”
