More real estate funds may have to impose extraordinary liquidity measures – Fitch
Investors in one of the UK's biggest commercial property funds - worth £2.5bn - have been temporarily prevented from taking out their money.
An opportunity fund has invested £439m in Liverpool-headquartered developer-operator Downing as part of a student housing joint venture.
European Property Investors Special Opportunities IV (EPISO 4) has acquired a 90% interest worth £439m in the joint venture, which owns a 2,756-bed portfolio of six halls in some of the most prestigious university cities across the UK.
The financial regulator has backed away from a total ban of holding illiquid assets in open-ended funds, despite chaos ensuing in the wake of the Brexit referendum when many funds had to temporarily close.
The Financial Conduct Authority said today that while it planned to review the way funds worked, it did not intend to outright prevent open-ended funds holding assets such as property.
Such changes would not help financial stability or protect the consumer, it said.
UK property investors are on the hunt for buildings in European cities to capitalise on demand for offices from the banking fallout from Brexit, it has emerged.
Shares in Man Group, the world's largest listed hedge fund, soared after it said it was acquiring a property manager which oversees $1.7bn in investment.
The doors are reopening on the £35bn of investors’ money locked in commercial property funds, after they were suspended in the wake of the Brexit vote when panicking investors feared a collapse in values.
Canada Life has lifted the suspension on its £450m property funds, although investors who want to take their cash out face a 7pc charge imposed in the wake of the UK's vote to leave the European Union.
The firm said this morning that although conditions in the UK commercial property market showed some stabilisation, property valuations continued to be subject to some uncertainty while the UK negotiates its exit from the bloc.
WEALTH and investment management firm Equilibrium Asset Management has sold all of its commercial property investments following the Brexit vote.
The firm, which held around £130m across commercial property funds in 2015, made some precautionary switches ahead of the vote, equating to around 7% of portfolios, in March and April this year.
A private equity vehicle run by the owner of Sunderland football club is understood to have raised more than $1.1bn (£839m) to invest in distressed property assets held by European banks.
Kildare, which is owned by Ellis Short, will focus the fund on debt and equity in real estate across continental Europe, capitalising on the scores of assets held by the continent’s bad banks.
Rumoured investors in the fund, which is the firm’s second, include the New Mexico Educational Retirement Board, which has allocated $80m, the Texas Permanent School Fund, which has committed $75m, and Texas Municipal Retirement System, which has put in $100m.
Aberdeen Asset Management has increased the value of its property fund two weeks after it slashed 17pc off its value, in a move that indicates some confidence is returning to the commercial property market.
Martin Gilbert, chief executive of Aberdeen, said this morning that he had been able to reduce the “temporary dilution adjustment” of 17pc that had been applied to the fund on July 6 to 7pc today.
Aberdeen made the decision to write down the fund’s value on the back of what it called “rapidly changing commercial property market conditions” in the wake of the vote to leave the European Union.
Henderson Global Investors is lining up a sale of the headquarters of Coutts bank on the Strand, London, as property funds try to raise cash to pay a rush of redemptions.
The building is understood to be worth around £220m and has been occupied by the bank since 1904. It benefits from being let to the Royal Bank of Scotland until 2037, making it attractive to investors wanting to guarantee a return over the next 10 years.
Aberdeen Asset Management has lifted the suspension of its multi-billion UK commercial property fund.
The company was one of several fund managers to suspend redemptions from property funds worth £18bn in the wake of the UK's Brexit vote last month.
The value of Aberdeen's fund was cut by 17%, leaving it worth about £2.7bn.
It began with Standard Life on Monday, then M&G followed on Tuesday. By Wednesday, six property funds had been suspended, after a rush by investors to retrieve their money in the wake of the Brexit vote.
As the Bank of England warned of a “future marked adjustment in commercial real estate prices”, the outlook for the sector suddenly looked far less certain than it had before the referendum.
Around £5bn of commercial property could be put up for sale as post-EU referendum turmoil prompts managers to revalue portfolios
The fear factor is causing investors to withdraw money from commercial property funds, according to one of the City's senior fund managers.
Philip Nell, a fund director at Hermes, said there had been "a massive over-reaction to what's been going on over the last two weeks".
A promise of instant redemption is incompatible with illiquid assets
London Central Apartments III (LCA III), the latest property investment fund to invest in prime central London’s private rented sector (PRS) remains open to investors after asset advisors London Central Portfolio (LCP) announced a three week extension to buy shares in the scheme.
Moves by M&G and Aviva follow Standard Life after surge in requests to redeem investments amid fears of a property crash
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