The cracks in European property that delegates warned of last week at the Expo Real trade show in Munich are beginning to show.
UK investment manager, Columbia Threadneedle, said on Tuesday that it was suspending dealing in its £453 mln (€516 mln) CT UK Property Authorised Investment Fund and its feeder fund to restore liquidity.
This move has come as investors pull funds out of some UK property funds given a toxic cocktail of a disastrous mini UK budget recently put forward by the UK government, inflation, rising interest rates, plus concerns over real estate occupational fundamentals, all adding up to a decline in values.
At Expo, there were whispers of UK investment houses seeking to offload property via “off market” deals underlining sensitivity of funds being seen widely as needing to sell assets.
Columbia Threadneedle said its other retail property funds were still open and unaffected, and there is no suggestion that its CT UK Property Authorised Investment Fund are among those seeking to sell assets.
But that prospect has now been heavily trailed in the mainstream financial press. The Financial Times reported on Sunday that the pace of withdrawals from UK commercial property funds had accelerated since the mini budget which analysts warned could spark a ‘rush to sell buildings at depressed rates’.
The CT UK Property Authorised Investment Fund’s own fact sheet says its largest holding is Reading Retail Park (6.5%), followed by Ocean Plaza in Southport (6%), City Link Retail Park (4.8%), Stirling Road at South Marston Park (4.4%), and Capability Green (3.9%).
It was launched in 2016 and is mostly weighed to industrials (46%), followed by retail warehouses, offices, shops, and ‘other’.
The vacancy rate is 14.4%.