Tuesday, July 5, 2016

The Brexit causes sudden freezing of three British real estate funds – Le Figaro

Faced with the massive influx of applications for cash withdrawals, funds invested in three offices and British businesses had to be occasionally closed since Monday. Investors fear that the Brexit do down the price of the stone.

British offices of Realtors starts making the cost of Brexit. In the space of just two days, three funds invested in this asset class were frozen to cope with the massive influx of applications for cash withdrawals, sign of a possible beginning of panic, according to some experts. Monday is the Standard Life insurer who first announced to close its fund manager EUR 3.4 billion invested in shopping centers, warehouses and offices. On Tuesday, it was the insurer Aviva and the asset manager M & amp; G Investments.

“The extraordinary market circumstances that impact the sector as a whole, led to a lack of immediate liquidity in the fund Aviva Investors Property Trust,” said a spokesman for Aviva Investors, the subsidiary of Aviva. “Consequently, we have acted to safeguard the interests of all our investors by suspending transactions in the fund with immediate effect,” he said. “This suspension will give Aviva Investors greater control over the management of cash flow and on the orderly conduct asset sales to meet our obligations to investors wishing to recover their investments,” he added. This gel will enable Aviva to not sell in a hurry commercial properties (offices, shops …) worth of 2.11 billion managed by its funds.

Same story on the side of M & amp; G Investments. “The claims have reached such a level that M & amp; G thinks it can better protect the interests of fund shareholders by temporarily suspending its activity”, justified M & amp; G Investments. The fund in question, Property Portfolio, invested in some 178 commercial real estate assets of the distribution sector, industry and offices. It manages some 4.4 billion pounds of real estate assets in total in the UK (€ 5.2 billion).

The London office prices could fall by 20%, according to experts .

“the dominoes begin to fall on the UK commercial property market (…). This is probably a matter of time before we see other funds follow the same path, “says Laith Khalaf, an analyst at Hargreaves Lansdown.

If the domino theory is confirmed, the commercial real estate supply could flow in the market, “which should lead to a downward pressure on prices,” adds the analyst. According to some experts, the value of London offices could fall by 20% in the three years following the departure of Britain from the European Union. “Foreign investors might be tempted by the fall of the pound but they might as well decide to stay away from a diving economy uncertain,” the analyst judge.

The boom stone has accelerated in 2013

the last property crash in the country, on the edge of the global financial crisis of 2008, was started by the difficulties of funding to meet their obligations. At the time, these funds were forced to freeze their operations after a massive influx of cash withdrawals. This resulted in a fall of more than 40% of British property prices relative to its highs. The stone was then experiencing a renaissance, driven by the readiness of the British upper classes to place their income and by masses of cash from particular Gulf or Russia. This boom has accelerated from 2013 and in London prices are now higher by over 50% to those of pre-crisis peak.

This is the sector property which now trembles in Britain

in addition to commercial real estate, it’s all the construction sector and real estate, which now trembles in Britain since the vote the Brexit, after experiencing the first signs of slowdown in recent months. In June, the construction industry had its worst month in seven years, weighed down by “investment decisions largely repelled and fear in the residential market,” said Tim Moore, economist at Markit.


No comments:

Post a Comment