Close Investments has announced it is to suspend dealing on its Closepip property fund in order to s...
Close Investments has announced it is to suspend dealing on its Closepip property fund in order to safeguard its assets in the face of redemptions.
The suspension began on 22 January and is anticipated to be in place for six months, although the length of the suspension may vary according to market conditions. Close Investments states that this decision has been made in the interests of the investors in the fund - an Isle of Man experienced investor fund - to ensure that the high level of redemption requests does not force property sales.
Trading has also been suspended in Active Commercial Estates, in which Closepip is a majority shareholder.
The move comes amid evidence that the beleaguered listed property sector is returning to favour as companies begin to attract attention, while redemptions have continued slowing on bricks-and-mortar funds.
Property shares had been languishing following poor returns and a widespread sell-off in 2007, but in mid-January the three largest UK Reits - British Land, Land Securities and Hammerson - all saw their share prices rise by at least 10%.
Ben Ritchie, co-manager of Aberdeen's Property Share fund, believes investors are seeing value again in the sector. "Last year, it had a pretty torrid time," he said.
"There were expectations of rising interest rates, and valuations were expensive at the start of 2007. Then the credit crunch hit, and a further 20% was wiped off the value of the sector."
However, he pointed to the strong balance sheets, low levels of debt and good management teams in place among property companies as a positive for the future.
Meanwhile, Midas Capital has also made its first foray back into the UK property market since 2006 with the purchase of shares in Brixton Estates at a 51% discount to net asset value.
Chief executive Simon Edwards said the discounts on some stocks are hard to ignore. "Having sold our UK property at the end of 2006, we continue to expect downward revaluations," he added.
"Open-ended funds may continue to suffer as these work through into fund prices. That said, the massive discounts to NAV now apparent in the quoted sector merit selective attention."
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