UBS lands second ADIC account for Asia – Exclusive

The Swiss investment bank has been awarded a S$250m mandate by a joint venture including the sovereign wealth fund for an investment program in the city-state.

UBS Asset Management, the division responsible for the Swiss bank’s real estate investments, has landed a S$250 million ($176 million; €164 million) separate account for investments in Singapore by a joint venture including United Arab Emirates sovereign wealth fund, Abu Dhabi Investment Council.

The mandate was awarded by Boustead Development Partnership, a joint venture between ADIC and Singaporean developer Boustead Projects, which has been capitalized on a 50-50 basis. With UBS serving as manager, the JV is expected to deploy the capital into office, pharmaceutical and high-tech developments or redevelopments in the city-state. Some of the assets have and will originate from Boustead’s pipeline. Once leveraged, the venture’s portfolio is anticipated to reach S$800 million in value.

To date, S$119 million of the equity has been deployed into four projects, two of which have been completed, including the regional headquarters for pharmaceutical giant GlaxoSmithKline, a 154,000-square-foot office in Singapore’s One North precinct. The two latest acquisitions are a 425,000-square-foot mixed-use development at the precinct’s Mediapolis area, and a 469,513-square-foot research and development center in Kallang iPark for Continental Automotive. Deals for both assets were struck this month and they are expected to be developed in 2018.

“The strategy for this mandate is fully aligned with the Singaporean government’s plan for its economy,” Graham Mackie, UBS’s head of real estate in Asia, told PERE. “The government is seeking to diversify away from some of the traditional sectors and into sectors including pharmaceuticals, technology and biotechnology, and there are numerous tenants that are incentivized to locate themselves here.

“Clearly there is a strong, educated workforce here. There is strong IP protection and Singapore is a strong location as a gateway city for Asia.”

The mandate is the second awarded to UBS’s Asia real estate division by ADIC following a mandate of similar scale and structure awarded for Australian multifamily residential investments in 2014. The state fund co-sponsored a venture alongside developer Grocon to develop a 1,200-plus strong residential project on Australia’s Gold Coast. The venture, called UBS-Grocon, is understood to have been initially capitalized with a similar amount of equity. The project will house athletes for the Commonwealth Games in 2018, after which it will become a multifamily property for lease.