UBS AG in Tie-Up with Grocon - Analyst Blog
12 Dicembre 2013 - 11:00PM
Zacks
According to a report in Bloomberg, UBS
AG (UBS), Switzerland’s banking giant, is venturing into
the Australian real estate market. The bank entered into a
partnership with Grocon Pty Ltd., Australia's largest privately
owned development, construction and funds management company. UBS
AG plans to invest around $9 billion (A$10 billion) over the next
five years through the joint venture (JV).
The deal is a result of investors’ growing demand for properties in
Australia due to the appreciation of home prices in the country,
which is yielding high profits. Given this, UBS AG plans to
strengthen its foothold in real estate in the Asia-Pacific region,
particularly the Australian market.
Australia occupied the third position in the most active
Asia-Pacific commercial property markets for the quarter ended Sep
30, trailing Japan and China. As of Nov 30, 2013, home prices in
Australia rose 8.3% since the beginning of the year.
Notably, UBS AG manages retail and industrial property worth $8
billion in Japan through a JV with Mitsubishi Corp. Further, the
bank has partnered with Chinese developer Gemdale Corp. in a
residential development fund.
UBS AG’s asset management business and Melbourne-based Grocon plan
to invest in high-quality office buildings, residential property
and other higher-yielding real estate classes. Based on investors’
demand, UBS Grocon Real Estate JV will deploy capital toward
Grocon’s current and planned projects worth A$2 billion as well as
other developments.
UBS AG’s huge investment centers on the turnaround in the Australia
real estate market. In the present scenario, investing in
Australian properties would yield higher returns in the long term.
Moreover, with the deal with Grocon, UBS AG will succeed in
providing top quality assets to both domestic and international
clients.
The bank has been grappling with a weakening investment banking
business with its performance registering a sharp decline over the
past few quarters. The stressed environment and stricter capital
norms have compelled UBS AG to optimize its business and come
forward with profitable decisions. Currently, UBS AG carries a
Zacks Rank #4 (Sell).
However, some better-ranked foreign banks include Grupo
Financiero Galicia S.A. (GGAL), HDFC Bank
Ltd. (HDB) and BBVA Banco Franc (BFR).
While Grupo Financiero Galicia and HDFC Bank carry a Zacks Rank #1
(Strong Buy), BBVA Banco has a Zacks Rank #2 (Buy).
BANCO FRANC-ADR (BFR): Free Stock Analysis Report
GRUPO GALIC ADR (GGAL): Free Stock Analysis Report
HDFC BANK LTD (HDB): Free Stock Analysis Report
UBS AG (UBS): Free Stock Analysis Report
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