Return to normal trading

SLI lifts suspension on property fund trades

Standard Life InvestmentsStandard Life Investments is the latest to reopen its property fund following a spate of redemptions which forced trading to be suspended.

The company will lift the restriction on its £2.5 billion UK Real Estate Fund, and associated feeder funds, from mid-day on 17 October.

The SLI UK Real Estate Fund suspended trading on 4 July in order to protect the interests of all investors. Aviva and M&G followed suit the next day with other firms doing likewise as stock markets suffered from a bout of extreme volatility.

SLI follows Henderson and Threadneedle in announcing that the suspension is being lifted.

In a statement, it said it implemented “a controlled and structured asset disposal programme in order to raise sufficient liquidity to meet future redemptions and work is ongoing to ensure the Fund is well positioned for markets in the long-term. 

“We now believe the commercial real estate market has stabilised and that the adequate level of liquidity achieved will allow the suspension to be lifted.”

By lifting the suspension, dealing in the Fund and Feeder Funds, purchases and redemptions of shares will return to normal on 17 October, with the first valuation point at noon that day. 

Dealing instructions to purchase or redeem shares will be accepted from 28 September in a written or faxed format only, ahead of the fund re-opening.

Providing advanced notice will enable investors in the fund to make any preparations required ahead of the re-opening.  

David Paine Head of Real Estate at Standard Life investments said: “In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly.

“During the period of suspension the fund has been able to restore liquidity through an orderly disposal of assets.  We are pleased with the progress made and the removal of the Market Value Adjustment, and able to announce the reopening of the fund next month.”

The Standard Life Investments UK Real Estate Fund invests in a diverse mix of prime commercial property.  It has a distribution yield of 4.04%.

Mr Paine added: “In our opinion, as the search for yield intensifies within a world of low interest rates and nominal growth, the outlook for UK commercial real estate returns and income remains attractive.”

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