SLI to reopen £2.5bn property fund


Standard Life Investments is to reopen its £2.5bn UK Real Estate fund and associated feeder funds in mid-October.

The firm, which was one of the first to suspend the property fund after the EU referendum, says the fund has now “sufficient liquidity” to meet future redemptions.

The fund will reopen on 17 October while the dealing instructions to purchase or redeem shares will be accepted from 28 September.

In August, the company confirmed the temporary suspension was still in place but under review, and changed the fair value adjustment on the fund from 3.5 per cent to 3 per cent.

The market value adjustment will now be removed.

Standard Life Investments David Paine head of real estate says: “In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly.

“During the period of suspension the fund has been able to restore liquidity through an orderly disposal of assets.  We are pleased with the progress made and the removal of the market value adjustment, and able to announce the reopening of the fund next month.”

The firm says the outlook on commercial property market has now stabilised and become more liquid.

Paine says: “The SLI UK Real Estate Fund invests in a diverse mix of prime commercial property. Its lower risk positioning should therefore be beneficial for performance at times of market stress and uncertainty and continues to offer a stable and secure income, with a distribution yield of 4.04 per cent.

“As the search for yield intensifies within a world of low interest rates and nominal growth, the outlook for UK commercial real estate returns and income remains attractive.”

Menawhile, the Aviva Investors Property Trust and the M&G Property Portfolio paif are the two remaining funds which are still suspended.

Henderson recently announced it will reopen its UK property fund in October while the Threadneedle Property fund reopened a week ago.

The Aberdeen UK Property fund, the F&C UK Property fund, the Kames Property fund all lifted their dealing freeze this month.