UBS Global Asset Management is about to announce the launch of a EUR 1 bn special real estate fund targeting core properties across Europe, an UBS spokesperson confirmed to PropertyEU on Thursday. The vehicle, called UBS (D) European Mega Core Property Fund, has already made its first investment with the purchase of the Isar­tor City redevelopment project on Munich's Isartorplatz old town square.

The 21,800-m2 office and retail scheme - formerly known as Rieger City - was purchased for a price of nearly EUR 100 mln from an unnamed US investor.

The new fund will focus on large-scale office buildings with some retail accommodation in major European cities, CEO Tilman Hickl told German newspaper Immobilien Zeitung. Big assets offer good value due to the lack of financing for mega transactions, he added.

UBS (D) European Mega Core Property Fund has raised EUR 100 mln at first closing, mostly from pension funds and other institutional investors. The fund - which will be leveraged by a maximum of 40% - will initially focus on the safe-haven markets of Germany, Switzerland, France and Belgium, accounting for 50% of the total investment. The remaining funds will be ploughed into other markets such as the UK, Spain and Scandinavia.