Union suspends property fund due to Tokyo holdings
The various natural and man-made disasters to hit Japan have led German asset manager Union Investment Real Estate temporarily to suspend dealing of its UniImmo: Global fund.
The Tokyo assets represent about 14% of the €2.2bn portfolio, according to a statement promulgated by the unit.
It has informed Germany’s regulator, Bafin, of its decision. Under German law, if a valuation for an open-ended property fund cannot be struck, that portfolio is required to suspend.
The 46-year old investment unit, based in Hamburg, is the specialist private real estate investor within the €18bn Union Investment group.
The manager of Unilmmo said: “With the impact of the nuclear incidents in Japan still unclear, especially at the Fukushima plant, and the economic consequences impossible to predict at present, Union Real Estate Investment GmbH contacted its external experts to request a re-evaluation of its properties in Tokyo.
“The corresponding expert committee has today informed us valuation is not possible at the present time given the exceptional circumstances in the area.
“Redemption of units will remain temporarily suspended until a fair price for the units can be calculated.”
Union added its Japanese properties suffered “no significant visible damage” following the earthquake and ensuing tsunami late last week.
Japan is one of 26 countries Union Investment operates in. About 60% of its property assets are outside Germany.