MSREI plots next global fund

Morgan Stanley Real Estate Investing (MSREI) is in the early stages of launching a global opportunistic real estate fund  after reconsidering launching a series of regional offerings, it was reported today.

The US bank declined to comment, but UK magazine Property Week said it was seeking $3 billion in capital commitments for the offering and that the change of heart came in the last few weeks. The report added there was no name for the fund yet or prospectus filed with the US Securities and Exchange Commission (SEC).

Up until now, it has been assumed that MSREI was continuing to eye separate US, Europe and Asia vehicles. In February last year, there were reports it was eying $1 billion alone for the US fund. 

News of the U-turn comes of the same day as MSREI announced a major deal in Russia for its current fund, Morgan Stanley Real Estate Fund (MSREF) VII Global, the investment period for which expires this June.

It is buying the Metropolis Shopping and Entertainment Mall, a 2.2 million square meter shopping center in Moscow, from local group, Capital Partners, for around $1.2 billion. Capital Partners developed the centre and opened it in 2009.  

The acquisition of the Metropolis shopping centre is the largest-ever transaction in the Russian commercial real estate market, said Morgan Stanley. “We are very pleased to be acquiring the Metropolis Mall in Moscow,” said Brian Niles, head of MSREI EMEA. “The acquisition is consistent with our strategy of investing in high quality assets in Russia, a market that should continue to benefit from strong growth in consumer demand.”

This is not the first investment in Russia that Fund VII has made. It has also invested in the Galeria Mall in St Petersburg. Niles said the Metropolis would deliver “operational synergies” and“strategic benefits” associated with owning two prime shopping centers in Russia. Metropolis is one of the most visited shopping centres in Moscow with approximately 55,000 customers per day.