UNITED STATES - Morgan Stanley Real Estate has raised $8bn (€5.94bn) for its most recently-completed international commingled fund MSREF VI International. – the largest sum ever raised for a single real estate fund.
Capital raised was $2bn more than originally intended but shows how much interest there is in international real estate investing, according to Morgan Stanley.
One of the bigger investors in the commingled fund is Pennsylvania Public School Employees Retirement System which has committed 25% of the total capital raise or no more than $400m.
That said, Morgan Stanley, its affiliates and employees will also contribute 20% of the total capital raise as a co-investment as investors in the commingled fund are projected to achieve at least a 20% gross IRR.
Morgan Stanley is off to a good start in investing the capital for the MSREF VI International opportunity fund as it has either invested or committed 45% of the equity which has transaction value of $20.5bn, given its 75% leverage.
The fund with a four-year investment period and maximum buying power in excess of $30bn, has seen particular interest because a major sum of its investments will be made in Europe and Asia, now an attractive investment market to pension fund money.
Purchases already include a combination of hotels and office deals, including the purchase of nine Intercontinental hotels and 10 Hilton Hotels in Continental Europe and the ANA Japan 13-property hotel portfolio along with the acquisition of the Akasaka Garden City office building in Japan.
There are also investments in new development projects in the United Kingdom, Spain, Canada, Japan, India, Korea and China as well as investment signings in real estate operating companies in the United Kingdom, Japan and China.
Western Europe will be one of the targeted regions for investment, particularly United Kingdom, Germany, Italy, France and Spain, but emerging real estate markets will be considered such as China, India, Russia, Turkey and Latin America.
Property types for the fund’s investment include a mixture of office, retail, residential and hotels and deals will be made on individual assets, portfolios or entity-level investments in companies.