Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

CBRE joins other UK property funds in deferring payments

Published 05/10/2022, 10:32
Updated 05/10/2022, 17:37
© Reuters. FILE PHOTO: Property estate agent sales and letting signs are seen outside an apartment building in Lichfield, Britain, May 3, 2022. REUTERS/Andrew Boyers/File Photo

© Reuters. FILE PHOTO: Property estate agent sales and letting signs are seen outside an apartment building in Lichfield, Britain, May 3, 2022. REUTERS/Andrew Boyers/File Photo

By Carolyn Cohn

LONDON (Reuters) -CBRE Investment Management has deferred redemption payments on its UK property fund due to market conditions, it said on Wednesday, joining several other funds taking similar steps to avert a cash crunch following recent turmoil in UK money markets.

Sharp rises in interest rates this year have encouraged pension funds and other institutional investors to switch out of property funds, industry consultants say, as they no longer need to hunt out yield through investment in riskier assets.

Outflows from property funds accelerated as markets reacted to the UK government's fiscal plans announcement on Sept 23. Out of 89 million pounds ($100 million) of capital pulled from property funds by UK-based investors in September, 71 million pounds of this took place in the days following the "mini-budget", according to data from funds network Calastone.

“Due to current challenging market conditions and an unpredictable transaction market resulting in a liquidity mismatch within the UK real estate market, CBRE Investment Management can confirm that it has deferred for one quarter the redemption payments for the CBRE UK Property PAIF," a spokesperson said in an emailed statement.

"This, we believe, is a prudent decision and in the best interest of all investors in the fund."

The fund is aimed at institutional investors.

Rival property funds aimed at institutional investors managed by Columbia Threadneedle, Schroders (LON:SDR) and BlackRock (NYSE:BLK) also said this week they were deferring payments.

However, another major real estate investment manager, Legal & General Investment Management, said it was not deferring payments in its funds.

© Reuters. FILE PHOTO: Property estate agent sales and letting signs are seen outside an apartment building in Lichfield, Britain, May 3, 2022. REUTERS/Andrew Boyers/File Photo

"Deferral is not in place on any LGIM Real Assets funds although, in very specific circumstances, it remains one of a number of liquidity management tools we have at our disposal to act in the best interests of investors," Mike Barrie, director of fund management for LGIM Real Assets told Reuters by email late on Tuesday.

($1 = 0.8862 pound)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.