Morgan Stanley targets E1bn spending power for EurAsian fund

The fund manager is looking for a further E250m (£200m) of equity by the end of September.

It has invested about 75% of the first E250m tranche of equity raised, solely from institutional investors, for the fund within a year. It said it had used the money to buy eight properties, of which five were in Asia and three in Europe.

The total amount spent to date by the fund, is E332m (£265m).

Morgan Stanley said it had kept to its strategy of investing no less than 50% in Asia and of no more than 50% in Europe. It said it intends to keep overweighting its Asian allocation in the future.

The fund targets core-plus investments of E25m-E120m (£20m-£96m) and targets returns for its investors of 7.5%-8%.

Attractive Parameters

Fund manager Mathias Hubner said: ‘Because of the then as now attractive parameters of their real estate economy and the heightened interest that institutional investors have been taking in them, the Asian markets will remain the focus of our investment strategy.

In Europe, we are currently reviewing investments in emerging markets, such as Russia and Turkey. Out of the Asian investments, at least 70 percent are to be allocated in the established real estate markets of Japan, South Korea, Hong Kong and Singapore.

So far, the Fund acquired four properties in Japan and one in Singapore.’

The next step

‘The next step may consist of investments in smaller real estate markets or emerging markets, such as Taiwan and China.

'There is relatively little correlation between the European and the Asian real estate markets.

'The combination of these two regions in the EurAsia Fund is therefore particularly well suited to minimise risks on the portfolio levels, and to achieve a stable performance for the overall portfolio in the process.’