UBS Asset Management Launches Open-end U.K. Property Fund

Main Photo: Eastwood Hall Nottingham

Date: February 2019

Location: Nottingham, Swindon, Stratford upon Avon, Northampton and Abingdon.

Name: Eastwood Hall Nottingham, Ettington Chase Stratford upon Avon, Alexandra House Swindon, Sedgebrook Hall Northampton and Milton Hill House Abingdon.

No. of Keys: 650

Seller: The Pears family, who also control Telereal Trillium, with a £6bn property portfolio in the UK, especially in London – Notting Hill and Finchley. The three brothers Mark, Trevor and David keep a very low press profile.

Buyer: The real estate and private markets team from the asset management arm of Swiss banking giant, UBS, has launched a long income UK property fund with an initial commitment of £90 million (€103 million).

With a net income return target of 5%, the UBS Long Income UK Property Fund will allow investors to access a portfolio of UK long-lease assets with a focus on alternative sectors.

The initial investment has been used to purchase a seed portfolio of five UK hotel assets totalling more than 650 rooms.

They have been let to the Compass Group (not to be confused with Compass Hospitality) on a 15-year basis.

The initial investment was made by “a major UK local government pension plan” and REPM is in talks with UK and overseas investors, UBS said in a statement that did not identify the institutional investor.

“The stable long-term, indexed income generated by long-lease property offers an attractive alternative for investors, and at the same time, provides diversification benefits to the rest of their fixed income and property portfolios,” said Howard Meaney, head of real estate UK at REPM.

“We are seeing a clear demand for this type of product from a broad range of clients seeking long-term, sustainable income streams, particularly those with liability matching commitments,” he added.

Price: £90m for the initial five hotels

Price per Key: £138,462

THPT Comment: Compass, via their Lime Venue division manage a number of venues (some 87 in the UK), but not known for their hotel management as such.

First Seen: IREI – Institutional Real Estate

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