M&G Real Estate’s first value-add UK fund has raised £125m (€141.2m) at first close.
Managed by Paul Crosbie, M&G UK Enhanced Value Fund (UKEV) is a seven-year, close-ended fund aimed at institutional investors in the UK, Europe, Asia Pacific and Canada.
M&G Real Estate said the initial funding includes a significant commitment from an Asian investor and a total of £500m 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 £15m to £75m, taking advantage of the risk aversion created by current political uncertainty.
M&G Real Estate said value will be added by repositioning and redeveloping assets and by exercising change of use and lease enhancement methods.
Crosbie, said: “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.”
Alex Jeffrey, the chief executive of M&G Real Estate, said: “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.”