GLOBAL - Morgan Stanley Real Estate is making its first move into Poland and expanding operations in Brazil, just as it is thought to be completing its biggest ever real estate fund launch.
The real estate manager has acquired a 25% stake in WAN SA, a Warsaw-based real estate development company specializing in the construction of residential, office and logistics sectors.
John Carrafiell, global co-head of Morgan Stanley Real Estate Investing, said, "We believe Poland’s strong economic growth and its demand for quality real estate provide an attractive opportunity to expand our investment platform."
Carrafiell said the capital injection should help the firm continue its organic growth by investing in several projects in Warsaw as well as other parts of Poland.
WAN has been active in the Warsaw residential and office real estate markets since 1995 but now has a significant and fast growing pipeline in many markets in Poland.
Likewise, Morgan Stanley is also growing its operations in Brazil, having last month agreed to acquire a 14.29% stake in Brazilian residential developer and broker Abyara Planejamento Imobiliario S.A.
Morgan Stanley believes there is "pent up demand" for residential properties and new builds in Brazil, particularly in Sao Paulo, where residential starts are nearly 50% off the recent high-water mark of the late 1990s. This has created a situation for the need for more new construction.
Morgan Stanley made both of these investments for its commingled fund, Morgan Stanley Real Estate Special Situations Fund III. The real estate manager is now out in the market trying to raise additional capital for the commingled fund. One of its more recent investors with a commitment of up to $200m ($148.5m euros) was the Washington State Investment Board.
These developments come at the same time as Morgan Stanley is said to be close to raising almost $8bn for its latest real estate investment fund, the MSREF 6 – making this its largest real estate fund launch to date.
The earlier MSREF 5 raised $4.2bn in assets to be invested in non-US global real estate when it closed in March last year.
It is believed this latest fund will invest 40% of the assets in Japanese real estate but Morgan Stanley refused to comment in any way on MSREF 6 because of SEC rules governing information around fund launches.
