L&G and Aberdeen add to property woes with price shifts
Legal & General Investment Management (LGIM) and Aberdeen have shifted down the market value of their open-ended property funds by 4.2 per cent and 3.75 per cent respectively.
The moves come after last week’s decision by UK voters to leave the EU created uncertainty over the outlook for the asset class.
LGIM and Aberdeen have followed Henderson and Standard Life Investments (SLI) by carrying out these “fair value adjustments” on property offerings in the wake of the vote. The adjustments would potentially make redemptions less likely.
LGIM said the change to its £2.5bn UK Property fund came, along with a move to weekly valuations of its underlying assets, at a time when it had become “very difficult to assess accurately the impact of the Leave vote on commercial property values”.
The company added it had “the ability to move to more frequent valuations as market circumstances require”.
Aberdeen enacted a similar change on its £646m UK Property offering, representing a downward shift of 3.75 per cent.
The fund house noted that properties coming to market now were “unlikely to achieve recent valuations in terms of sale price - at least for the time being”.
Henderson and SLI also both cited the potential effect of the referendum result on commercial property prices.
An M&G spokesperson confirmed there were no plans for price adjustments on its £4.7bn Property Portfolio. However, the fund is now monitoring valuations on a weekly basis, instead of monthly.
Previously, Henderson, SLI, M&G, Aberdeen and Columbia Threadneedle had all shifted their open-ended property funds to bid pricing, effectively wiping several percentage points off returns, as sentiment turned against the asset class in the build up to the vote.
