HONG KONG (Reuters) – UBS plans to launch a fund that will pour about $1 billion (500 million pounds) into Chinese property, a further sign of enthusiasm for Asia at a time when investors are nervous about ailing European and U.S. real estate markets.
Braving a sector that Beijing is desperate to slow, the Swiss bank signed a deal to build housing with Shanghai-listed developer Gemdale Corporation last month.
It is now looking to raise about $300 million in equity to finance the venture, which will include the bank’s own money as well as investment from its clients, and will be supplemented by debt to help lift returns.
"The focus is on residential, and we’re hoping to launch a vehicle, and we’re working on details," said Lijian Chen, head of China real estate for UBS Global Asset Management.
"We’re targeting $300 million in capital overseas, with leverage, to give us roughly a billion dollars of buying power," he said in a telephone interview from New York.
