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Property Funds Update – Written on the 14th April 2020

It is prudent to bring to your attention that all property funds that can be invested in within the UK market have been suspended.

The problem is a property-fund-wide issue, but it is important to know that it is NOT related to liquidity concerns, but rather that valuations of assets in the portfolio cannot accurately be attained. More info below.

In summary, markets around the world have experienced huge disruption as COVID-19 spreads and trading in the UK property market is being severely impacted. As a result the funds’ Standing Independent Valuers have informed funds that it is not currently possible to provide accurate and reliable valuations for certain assets, including the properties held in the Funds. All property funds, including some that our clients are invested in, are unable to produce a price for the Fund which they can say with any confidence reflects the true value of the assets. Therefore in order to protect the interests of investors, the property fund(s) have been suspended.

This action reflects the exceptional circumstances in the UK property market and the need to protect client interests by suspending trading when there is material uncertainty regarding how the assets should be valued. Providers will aim to lift the suspension as soon as confidence returns to the market and there is more certainty regarding asset valuations, taking into account the best interests of customers and investors.

We will of course continue to monitor the property sector on a regular basis and will update you with any significant news.

 

Written by Greenfields Financial Management Ltd.

This article is for information only and should not be treated as advice. No action should be taken in respect of this article without independent financial advice. This information represents the opinion of Greenfields Financial Management Ltd. only.