Standard Life has completed the sale of three properties for its £328m Property Income trust.
The sell-off, which amounts to £12.4m in assets, includes:
• A small industrial asset in Witham, which was completed the day after the EU referendum, for £3.3m.
• Causeway Side House in Teddington, sold on 1 July for £6.3m.
• A small retail parade in Kingston Upon Thames, sold on 8 July for £2.8m.
The sale of the property investment trust comes after the asset manager was the first to suspend trading in a real estate fund, after investors panicked and pulled out of the illiquid investment vehicle following the Brexit vote.
Jason Baggaley, manager of the investment trust, said the sales of the properties are “in line” with the company business plans.
He said proceeds from the sales will be used to reduce the level of borrowings under the trust’s credit facility, “until such time as we believe suitable investment opportunities exist”.
Standard Life has also renewed leases on four units, with two tenants, on its industrial estate in Aberdeen.
Ben Yearsley, investment director at the Wealth Club, said the sale was a sensible move by Standard Life, partly because it reduces gearing in the trust.
“That makes perfect sense,” he said, adding gearing costs in a challenging market.
Mr Yearsley also said it shows the property market is not suffering as it did in the 2008 financial crisis because people are actually buying the properties from Standard Life.
“People were panicking and selling out of these property funds last week for no real reason, and I think over the long-term the UK property market will still be an attractive place to invest.
“This, in my view, proves people are still interested in buying property.”
FTAdviser’s parent publication the Financial Times revealed yesterday (12 July) that Henderson was planning to sell the headquarters of the private bank Coutts in a bid to provide liquidity for investors in their suspended property fund.
katherine.denham@ft.com
