M&G property fund remains suspended six months on
The fund was suspended in December 2019 due to high levels of withdrawal requests by investors at a time of Brexit uncertainty and structural shifts in the UK retail sector.
In an update today, M&G stated: “The authorised corporate director of the M&G Property Portfolio (“the fund”) has decided, with the agreement of the fund’s depositary, it can best protect the interests of all of its investors by continuing the temporary suspension in dealing in its shares.
“The fund’s standing independent valuer – Knight Frank – will continue to apply a statement of material uncertainty to its valuation due to reduced transactional evidence available on which to base valuations. However, they have announced the material uncertainty clause for UK industrial and logistics assets will be lifted as of 12 June – accounting for circa 23% of the fund’s assets.”
M&G added it is continuing regular dialogue with occupiers to ensure rental income is received.
“Nine weeks after the Q1 March rent collection, the fund has received circa 76% of rent, which compares to more than 90% received at the equivalent point in 2019.”
The fund has approximately £180.8m under offer for sale and based on all assets being exchanged or completed, this would take the total cash holding to 16.1%. At the end of May, the cash held by the fund was 7.9%.
Since the fund was suspended in December, M&G has completed £148.2m of transactions.
Investors are reminded that the fund continues to be actively managed during the suspension and M&G continues to waive 30% of the fund’s annual charge “in recognition of the inconvenience caused to our clients and customers”.
The suspension will be reviewed again in 28 days.
The update comes a day after it was announced that Fiona Rowley, co-manager of the M&G Property Portfolio, is leaving the company after more than 27 years. Justin Upton will resume full responsibility for the management of the fund after a handover period.
And just yesterday, BMO Global Asset Management became the first property fund to resume dealing in its Property Growth & Income fund after its suspension three months ago.