Property Players Push the Panic Button by Finance News Bulletin
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Published: 07/12/07
Britain's largest possessions funds have just hit investors with a double whammy Not only have portfolio principles been slashed again, but some managers won't let you get your cash for a yearAnd fears are mounting that in trouble transaction levels could be heralding a return to the bleak existence of the last slouch, 15 years agoNews that Norwich Union has chopped over 7% off the valuation of the £3
6bn Norwich possessions Trust, the UK's largest profitable property fund, and has also written down other similar portfolios has sent a shake down the spines of investors in bricks and gunM&G has cut the price of its offshore M&G Property finance by 72% following last week's imposition of 90-day's become aware of for institutional investorsOther sector managers feeling the pain have been New Star, decree Asset organization, Scottish Widows and Standard Life
Though perhaps the most unnerving recent development was the admittance from several property managers that investors would have to wait up to a year to get out their cash out Deutsche Bank, Triton and Morley have all now imposed 12-month redemption clauses on unit sellersAnd Norwich Union has admitted ‘preparing for every possibility' by forming plans to hang redemptions, ie
stopping investors making any sales at the instant, in the Norwich Property Trust in the event of more selling Although the boss denied that there was any immediate prospect of such a suspensionThe independent surveyors who worth the portfolios have had a rethink Factoring in a senior yield basis has lowered their estimates of the value of individual properties
Add them all up, and the collection takes a hitRising interbank rates have combined with the fallout from the US sub-prime debacle in hush-up investor demand for UK profitable property As transaction volumes collapse, fears are growing that a repeat of the near the beginning 1990's property crash might be just round the corner as confidence erodespossessions advisers Jones Lang LaSalle reckon that for this day's fourth quarter, the worth of UK transactions will be about £5bn, compared with £15bn in the third quarter and £18
6bn in the fourth district of 2006October saw a 19% slide in commercial property values, the main fall for 17 years, reports the respected sector check the Investment Property DatabankNone of this will come as a enormous surprise to Fool readers, whom we warned most recently on 10th October about commercial possessions prospects:"possessions stocks are already down over 30% on average this year
But I haven't yet seen quite enough darkness and despondency yet When landlords create to sound really depressed because they can't find any buyers, anywhere, then I'll create getting paying attention in buying REITs"But keep an eye on Segro (LSE: SGRO) , the industrial park developer previously called marsh Estates Having halved its older management, earlier this year the company showed it was on the ball by beating its £1
5bn US business and recurring £250m to shareholdersFrom 780p at the create of 2007, Segro has plunged to 427p where it stands on a discount to published mesh assets of 47% and a give way of 6%That's a heck of a lot of fear built into the cost Though I'm aware there's a risk of more downside, the shares are now in my target trade range
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Equity release a costly choice - Published:19/12/06
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