By Carolyn Cohn
LONDON (Reuters) – CBRE Investment Management has postponed redemption payments to its UK property fund due to market conditions, it said on Wednesday, joining several other funds taking similar action to avoid a cash crisis at the following the recent turmoil in UK money markets.
Sharp rises in interest rates this year have encouraged pension funds and other institutional investors to exit real estate funds, as they no longer need to seek yield by investing in higher-value assets, industry consultants say. risky.
Outflows of real estate funds accelerated as markets reacted to the announcement of the UK government’s budget plans on September 23rd. Of £89 million ($100 million) of capital withdrawn from property funds by UK-based investors in September, £71 million took place in the days following the “mini budget”, according to data from the Calastone fund network.
“Due to the current difficult market conditions and an unpredictable deal market resulting in a liquidity mismatch in the UK property market, CBRE Investment Management can confirm that it has deferred redemption payments for CBRE UK by a quarter. Property PAIF,” a spokesperson said. in an emailed statement.
“We believe this is a prudent decision and in the best interest of all investors in the fund.”
The fund is aimed at institutional investors.
Rival real estate funds for institutional investors run by Columbia Threadneedle, Schroders and BlackRock also said this week they were withholding payments.
However, another major property investment manager, Legal & General Investment Management, said it was not deferring payments into its funds.
“The rollover is not in place on any LGIM Real Assets fund although, in very specific circumstances, it remains one of the many cash management tools we have at our disposal to act in the best interests of investors,” said Mike Barrie, fund manager. LGIM Real Assets management told Reuters via email on Tuesday evening.
($1 = 0.8862 pounds)
(Additional reporting by Elizabeth Howcroft; Editing by Alex Richardson, Sinead Cruise and Jonathan Oatis)