UBS Global Asset Management had little trouble raising a €750m ($950m) eurozone office property fund this summer, on the back of strong UK performance and substantial investor interest in the sector.

The fund, which has bought offices in Germany and France and added 683,000 sq ft of Dutch office and industrial assets worth €109m to its portfolio, marks a period of European expansion for UBS. In continental Europe the fund manager runs €9.8bn in property, more than half of which is in Swiss funds that between them account for a third of the Swiss market. UBS wants to develop its European offering. Alongside the closed-end eurozone office fund it plans a core open-ended fund that will invest in office and retail property. It is also seeking more institutional accounts. In the UK, business is centred on the flagship £2.2bn (€3.3bn) Triton commercial property fund, which has delivered consistently strong performance. Over one year it returned 21.3% against the HSBC/AREF all-balanced funds median of 21.1%. Over three years Triton is below benchmark by 0.3 percentage points but is ahead by 0.5 over five years. The Triton fund is known for properties such as Milton Gate on Moor Lane in the City of London, which it bought last year for £50m and is developing. It generated a 5.1% capital growth in the second quarter, according to Triton, and there is "strong tenant interest" in the property. New products are being developed for the UK market, including a secure income property fund aimed at institutional investors, with longer leases and more security of income than a typical fund. Consultants said this diversification and innovation was one reason for UBS's success. One said: "It has a lot of strength in the UK but I think it is looking to diversify, and that is an aspect that we like. "There are a number of managers developing secure income-type products but UBS was one of the first." The strength of the UK fund management team, led by Richard Tanner and Cliff Hawkins since 1994 and 1991 respectively, is another important factor behind UBS's success, said the consultant. "If I had to pick one thing we really like, it is the calibre of the individuals and the process for selecting the investments. "The team is structured so that each asset manager is responsible for 10 to 15 properties, and all ideas are run past the two team heads. All decisions get a real going over," he said.