The joint venture between UBS’s asset management business and the Melbourne-based developer will invest in high-quality office buildings, residential property and other higher-yielding real estate classes, UBS said in an e-mailed statement. UBS Grocon Real Estate will have the first right of refusal on the Australian builder’s planned developments, the bank said.
“This partnership forms part of our strategy to strengthen our real estate presence in the Asia-Pacific region and specifically in the Australian market,” John Fraser, chairman of the venture, said in the statement. Fraser will retire as chief executive officer of UBS’s global asset management business next year, while staying on as chairman, the bank said this month.
The joint venture comes as investor demand for Australian commercial real estate grows, driven by relatively higher yields, and home prices in the nation’s biggest cities reach record levels. Australia was among the three most active Asia-Pacific markets for commercial property transactions in the three months to Sept. 30, after Japan and China, data from CBRE Group Inc. show. Home prices across the nation’s biggest cities jumped 8.3 percent this year to Nov. 30, according to the RP Data-Rismark home value index.
UBS Grocon Real Estate will consider investing in some of Grocon’s A$2 billion ($1.8 billion) of planned projects and in other developments, according to the statement.
Daniel Grollo, CEO of Grocon, will be a non-executive director, and the rest of the board will be appointed in the coming months, UBS said.
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