Outflows prompt SLI to reprice property funds

Standard Life Investments (SLI) has changed the way its prices several of its property funds as a result of outflows of investors capital.

Following six months of poor returns from the sector, the group has altered the pricing on five of its life and pension property funds from offer to bid basis.

As a result of the pricing changes the unit prices of the funds fell 6.7%. According to the group this fall was a result of stamp duty costs incurred by changing the pricing of units from a maximum basis to a minimum basis.

The Prudential carried out the same exercise on Property Life and Property Pension funds at the end of June and other life offices are believed to be considering similar moves.

According to SLI, as the funds invest directly in bricks and mortar, the outflows have forced the portfolios to liquidate a number of holdings and realise assets.

Mark Dampier, head of research at Hargreaves Lansdown, says the selling of commercial property demonstrates that a lot of “hot money” has been invested in the sector over the past two years.