UBS Asset Management’s Global Real Estate (GRE) business provided four loans totaling £34.8 million (€28.2 million; $31.5 million) in Q2 through its UBS Participating Real Estate Mortgage Fund (UBS-PREMF).
The largest of the deals is a seven-year, £16 million loan backing an office property situated on a business park in Aberdeen, Scotland, which according to the lender is fully let through a 20-year lease agreement, followed by a £10.25 million loan for the comprehensive refurbishment of an office building in Bristol.
The remaining financings include a £6.5 million bridge loan for the residential conversion of an office property at Millharbour in London’s Docklands; and a £1.89 million additional facility extending an existing £22.21 million development and investment term loan for the conversion of three office buildings in Newcastle into student housing.
The fund has lent 12 loans totalling £159.5 million across 28 UK assets since inception. It will have deployed up to 66 percent of its total equity following its close in December 2016, with £241 million raised. It has generated £54.5 million of repayments by borrowers and its net portfolio size currently stands at £105 million.
“In line with our objectives when launching this fund we have completed a diverse range of interesting deals, lending against new purchases, refinancing and development finance and across a wide variety of sectors, including alternatives,” said Anthony Shayle, head of global real estate – UK debt and portfolio manager for UBS-PREMF, in a prepared statement.
“We continue to see a high level of potential deals and very much remain open-for-business following the outcome of the UK’s Referendum on EU membership, which we anticipate will create opportunities for alternative lenders such as UBS-PREMF.”
UBS-PREMF is a closed-ended UK debt fund launched in December 2013. It targets property lot sizes of up to £40 million and up to 75 percent loan-to-values. It has an expected IRR of 8-10 percent per annum with total returns driven by interest from the loan portfolio, plus a share of both rent and capital appreciation from the underlying property assets.
UBS Asset Management’s Global Real Estate business actively manages real estate investments of approximately €67.3 billion globally and regionally within Asia Pacific, Europe and the US, across the major real estate sectors.