St. James's Place has lifted the suspension on its range of three UK commercial property funds, following its independent valuer CBRE's decision to lift the Material Uncertainty Clause (MUC) it applied in March in response to the impact of the coronavirus pandemic.
It follows the Royal Institution of Chartered Surveyors (RICS) recommending this morning (9 September) a "general lifting" of material valuation uncertainty over the valuation of "all UK real estate", with exception of "some assets valued with reference to trading potential".
In response, CBRE, which is a member of RICS' Material Valuation Uncertainty Leaders Forum, lifted the MUC which had been in place since 18 March.
"The removal of this clause means that they are now able to value, with confidence, the properties held within the St. James's Place UK Commercial Property funds due to increased transactional evidence," SJP explained in a statement.
The three reopened funds are the SJP Property Unit Trust, and the SJP Property Life and Property Pension funds, which together represented around £3.6bn in AUM at the time of their suspension.
SJP confirmed that the reopening of the funds means that the firm is able to "accept instructions to purchase, sell or switch units in the St. James's Place Property funds and all their variants", with the first client transactions slated to take place on 10 September.
The removal of this clause means that they are now able to value, "with confidence", the properties held within the St. James's Place UK Commercial Property funds due to increased transactional evidence.
Each of the several UK property funds that remain suspended, which together represent billions of pounds in client assets, are likely to be cautious of liquidity levels upon reopening in case of large scale investor redemptions. Funds in the IA UK Direct Property sector have been forced to suspend in the past as a result of large scale redemptions, reflecting the "liquidity mismatch" inherent in the vehicles.
The sector's average cash weighting stood at 16.5% at the end of August, according to FE fundinfo.
SJP said: "We would like to thank clients for their patience and understanding during the period of suspension.
"The decision to suspend was not due to volatility in the market, or liquidity and cashflow constraints in the fund, but was driven by the challenges in pricing properties with confidence."
Aberdeen Standard Investments
This morning's RICS decision was also welcomed by Aberdeen Standard Investments, which said it would reassess its suspended Aberdeen UK Property fund's reopening for 30 September, when its next valuation is due.
It explained that while the MUCs have now been removed, "the most recent valuation for the fund was 'uncertain' at the time [of suspension] and will require to be revisited in the normal course before any fund trading could conceivably re-commence".
ASI said investors should not anticipate the fund reopening before 30 September "as a minimum", but investor interests "will remain our primary consideration throughout this period of evaluation".
It added: "Further to [the MUCs] removal, we do need to take a number of further factors into consideration when making any decisions around the daily dealing suspension.
"These factors include the liquidity levels (current and forecast) within the fund, together with forecast fund flows and asset or market liquidity.
"These are all areas we have been monitoring but which move dynamically with developments in the market - one of the developments being removal of the [MUC] itself, for example."
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