Property  

Columbia Threadneedle swings property fund price by 5.3%

Columbia Threadneedle swings property fund price by 5.3%

Columbia Threadneedle has become the latest fund house to shift the pricing on its open-ended property vehicle, a move which effectively wipes 5.3 per cent off returns for redeeming investors.

The move from offer to bid pricing on the fund house’s £1.4bn UK Property fund managed by Don Jordison and Gerry Frewin comes as a trio of funds did the same last week.

Mr Jordison said the move had been made to “ensure the fair treatment of all investors”, adding the fund had not been immune to the outflows seen across the property sector this year.

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Last week, Investment Adviser revealed that Henderson and M&G moved their UK property funds away from bid pricing, with Standard Life Investments later following suit.

The moves are aimed at ensuring existing investors do not bear the brunt of the transaction costs involved should properties need to be sold to meet redemption requests. In the meantime, the funds’ returns have all been cut by around 5 per cent.

Mr Jordison said of Columbia Threadneedle’s move: “We aim to ensure the fair treatment of all our investors whether they are transacting now or investing for the longer-term.

“This decision was made with the aim of preventing any investors being disadvantaged by the negative impact of transaction costs.”

The upcoming referendum on EU membership, and concerns that the UK commercial property market may now be overheating following a strong post-crisis recovery, have both contributed to a change in sentiment on the asset class, according to fund selectors.

The IA Property sector suffered net retail outflows of £119m in February, the most since November 2008. Total outflows for the first quarter stood at £166m.

Selectors have warned more moves to change pricing would only increase negative sentiment and force other investors to consider redeeming.