UBS AG, Switzerland's largest bank, plans to enter Australia's property market by investing as much as A$10 billion ($9 billion) over the next five years.
The bank will partner with Australia's largest closely held builder Grocon Pty, to win out against other global capital rushing into the country's real estate market, Trevor Cooke, Sydney-based head of Asia-Pacific real estate at UBS, told Bloomberg.
"There's significant competition in Australia from pools of capital for access to investment-grade stock," Mr. Cooke said. "The best way to offer our clients realistic solutions is to partner with an originator. The Asia Pacific as a whole is a strategic priority and Australia is one of the most attractive markets in the region."
Direct investment into commercial property in Asia Pacific increased 33 percent during the third quarter from a year earlier, according to a Jones Lang LaSalle report. Australia, China and Japan -- the largest markets in the region -- accounted for 69 percent of the completed commercial transactions in the region for the first nine months of 2013.
Through a joint venture with Mitsubishi Corp., UBS manages $8 billion of retail and industrial property in Japan, and partners with Chinese developer Gemdale Corp. in a residential development fund on the mainland, Mr. Cooke told Bloomberg.
The partnership with Grocon will begin by focusing on prime office properties and residential developments in Australia.