Morgan Stanley P2 Value fund to invest EUR 800m

Morgan Stanley's open-ended P2 Value fund will invest around $1 bn (EUR 804 mln) in property globally over the next 12 months, according to Walter Klug, a member of the board of Morgan Stanley Real Estate Investment GmbH, based in Frankfurt.

'The current climate has definitely affected out investment strategy. We are very interested in markets like the UK and the US, where there has been the most price movement because we think they offer the best opportunities. That said, we are also looking to invest more in Asia,' he said.

The fund, which was launched two-and-a-half years ago, currently has around EUR 2bn of assets under management. At present, around 60% of the fund is invested in Europe, in markets such as Germany, the UK, France, Spain and the Netherlands. An additional 30% of the fund is invested in Asia, with the remaining 10% in North America.

However, the fund aims to up its exposure to both North and South America to take advantage of more attractive pricing in the region. The fund already owns a 95% stake - equal to just over EUR 147 mln - in Legends Village, a 65,187 m² shopping mall in Kansas City, in the US.

'We would like to have around 30% of the fund invested in North and South America, with an additional 40% invested in Europe and 30% in Asia,' Klug added. In Europe, the fund will target retail properties across the UK. 'Prices have already fallen, so it could be a good anti-cyclical play to invest at this time, even if there is a recession.'

The fund is unlikely to invest in other European markets in coming months as it wants to lower its allocation to Europe, Klug said.

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