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UBS-CLOVA is the best performing unlisted real estate fund in calendar year 2012
London (25 January 2013) – UBS Global Asset Management’s Global Real Estate – UK team has announced that its UBS Central London Office Value Added Fund (UBS-CLOVA, the Fund) has topped the list of unlisted real estate funds to become the best performing fund in 2012, when comparing its one year track record with all balanced and specialist real estate funds within the AREF/IPD UK Quarterly Property Fund Index (AREF/IPD UK QPFI).
The Fund produced a total return for the year ended 31 December 2012 of 16.1% while the AREF/IPD UK QPFI All Property Fund Index delivered a total return of 1.1% for the same period. This follows a strong year in 2011 when the Fund’s one year total return of 14.6% placed it third relative to the published performance of all balanced and specialist funds within the same index.
The Fund’s strong performance in 2012 was driven largely by capital growth from asset management initiatives. Over the year, the Fund concluded a significant number of new lettings and lease renewals with a combined annual rent-roll over GBP 4.5 million. The most notable deals included a 92,500 sq ft pre-let at Friars House, SE1 to Practical Law Company and a 25,650 sq ft letting at One King Street, EC2 to Executive Offices Group. This activity helped to reduce the Fund’s vacancy rate from 13.5% in March 2012 to 5.4% as at 31 December 2012, and increase the average lease length from 4.0 years to 8.25 years.
The Fund disposed of one asset during the period. Following the refurbishment and letting at One King Street, EC2 in December 2012, the Fund sold its interest for GBP 32.8 million, which equates to a 5.25% net initial yield, having acquired the asset in March 2011 for GBP 19.5 million. The asset provided an annualised ungeared IRR in excess of 30%.
The period of strong performance follows a strategic decision in late 2010 to reposition the Fund to focus on Central London offices only, in anticipation of the strong performance of this sector. Subsequently, all non-Central London assets were sold. Sam Sananes, Portfolio Manager for UBS-CLOVA, stated: "The decision to focus the Fund on Central London has proved to be a good one. The previous strategy included investment in the South East office market which has been far less resilient. In 2012, we have secured nine new investors for the Fund and its gross asset value has grown by more than 25%."
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Notes for Editors
UBS-CLOVA is a specialist closed-ended property fund that invests in the Central London office market. Sam Sananes, 35, Portfolio Manager for UBS-CLOVA, has been in this role since September 2008 and is responsible for the strategic management of the Fund (including investment transactions and asset management), investor relations and business development.
About Global Asset Management and Global Real Estate
UBS Global Asset Management is a large scale asset manager with well diversified businesses across regions, capabilities and distribution channels. It offers investment capabilities and investment styles across all major traditional and alternative asset classes. These include equity, fixed income, currency, hedge fund, real estate and infrastructure investment capabilities that can also be combined in multi-asset strategies. The fund services unit provides professional services including legal fund set-up, accounting and reporting for traditional investment funds and alternative funds.
Invested assets totalled some GBP 388 billion as at 30 September 2012. The firm is a leading fund house in Europe, the largest mutual fund manager in Switzerland1 and one of the largest fund of hedge funds and real estate investment managers in the world.
With around 3,700 employees, located in 25 countries, we are a truly global firm. Our main offices are in London, Chicago, Frankfurt, Hartford, Hong Kong, New York, Paris, Sydney, Tokyo, Toronto and Zurich.
UBS Global Asset Management’s Global Real Estate actively manages real estate investments, worth approximately GBP 40 billion2 in Asia, Europe and the US and across the major real estate sectors, making it the largest global real estate investment manager worldwide based on equity.3 Its capabilities emphasise core and value-added, but also include other strategies across the risk/return spectrum. These are offered on a global, regional and country basis and through open and closed-end private funds, customised investment structures, fund of funds, individually managed accounts and publicly traded real estate securities.
1. Source: Lipper FundFlows Insight Report (as at 30 September 2012) 2. Source: UBS Global Asset Management. Assets under management stated on gross asset value basis, reflecting property values as at 30 September 2012, where available. Includes assets managed by our joint venture with Mitsubishi Corporation, Japan. Ranking based on assets under management of the top global real estate investment managers, as stated on official company internet sites as at 30 September 2012.
3. Based on Pensions & Investments’ annual survey of the largest real estate managers 2012; data as at June 30, 2012; based on equity under management – this excludes leverage and real estate securities.
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