UK - Commercial Property News December 2019

Commercial property is always a very newsworthy topic. Here is a roundup of the latest news (December 2019) concerning commercial property and investments in the UK, including which the 2020 vision fro commercial property data.

Think carefully about how you get exposure to UK commercial property. More than three years on from the vote to leave the European Union (EU), investors remain highly uncertain about the form and timing of the UK’s departure from it. And although the effect of uncertainty on prices could translate into big gains for domestic-facing assets if the picture becomes clearer, it has triggered the return of a familiar problem for investors who hold open-ended UK property funds, reports David Baxter in Investors Chronicle.

M&G Property Portfolio(GB00B89X8P64), a fund with assets under management of £2.5bn, suspended trading earlier this month. M&G Investments said that it had been subject to “unusually high and sustained” investor outflows in recent months, at a time when Brexit-related political uncertainty and structural shifts in the UK retail sector have made it difficult to sell commercial property. Prudential (PRU) has also suspended a smaller fund that invests in M&G Property Portfolio.

However, concerns centre on other large open-ended property funds and whether these are also at risk of suspension. M&G Property Portfolio was just one of seven open-ended property funds to temporarily suspend trading in 2016 when uncertainty triggered by the vote to leave the EU made it difficult to sell a property and prompted nervous investors to withdraw from property funds. Although net outflows from M&G Property Portfolio have been particularly high this year, amounting to about £901m in the first 10 months of this year alone, other funds have also experienced redemption requests, just as properties may become even harder to sell. The news of M&G Property Portfolio’s suspension could also prompt investors in other funds to rush for the door and once a fund struggles to sell assets quickly enough to return cash to investors, the suspension of trading becomes highly likely.

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Any sign of greater clarity around Brexit could prompt an uplift for UK assets, rejuvenating parts of the UK property market and encouraging investors to put money into or stick with open-ended commercial property funds. But to provide a snapshot of how the funds that suspended trading in 2016 have been faring in less certain times, we have outlined their size at the end of October and the net outflows that they endured over the first 10 months of this year, as well as recent performance.

About Hayven Property Tax:

Hayven Property Tax is an independent commercial property tax consulting company specialising in capital allowance claims for commercial properties.

Based in Cardiff, Hayven Property Tax are able to service clients across the UK.

Find out everything you need to know here: www.hayvenpropertytax.co.uk/commercial-property-news-december-2019/