Columbia Threadneedle to lift suspension on UK property fund
Columbia Threadneedle Investments has announced its intention to lift the trading suspension on the Threadneedle UK Property and feeder fund.
The fund’s depositary, Citibank Europe, UK Branch, and the FCA have been informed of the decision to lift the suspension on 26 September 2016, at the 12 noon valuation point.
Trading in the fund was suspended on 6 July 2016 in order to protect existing investors in the wake of market instability following the UK’s decision to leave the EU, which led to significant outflows in retail property funds.
The fund will open without redemption penalties, and will return to standard monthly valuations. It will re-open on a bid basis, which was the same basis as prior to suspension.
Since July the fund has completed, exchanged or agreed to sell 25 properties totalling £167m (€197m) across all UK regions and property types, with no forced sales. The prices achieved are in aggregate less than 1% down from the last independent valuation prior to the referendum.
The yield on the fund is currently 6.6% against proven valuation as at 31 July 2016. In the current climate of low growth and low returns from other asset classes, and with the UK property market yielding 5%, UK property offers “a significant in-built risk premium” for long-term investors,” Columbia Threadneedle said.
“In the short period following the referendum we saw animal spirits drive unprecedented levels of redemptions from daily dealt open-ended property funds. Much of the earlier commentary now appears slightly irrational and more informed reflection has settled the market. Any effects of the Brexit vote on the overall UK economy – negative or otherwise – will take many months if not years to transpire and some time after that for the property market,” said Don Jordison, managing director of Property at Columbia Threadneedle Investments.