Real estate investors circle as property funds offload offices and warehouses
Real estate investors are preparing for discount deals as property funds are pressed to sell offices and warehouses after coming under increasing pressure following the government’s “mini” Budget last month.
Property funds have faced a wave of withdrawals and will have to sell assets to meet redemption requests. Large asset managers and cash-rich private investors are circling, preparing to buy up assets pushed on to the market as a result.
“For the right asset we might step in in the next month,” said Tom Betts, director of structured finance at Topland Group, the investment company set up by property entrepreneurs Sol and Eddie Zakay, which has more than £1bn to spend.
The increase in gilt yields since the “mini” Budget has forced pension funds running liability-driven investment strategies to sell off assets, including property fund holdings, in order to meet collateral calls.
Just under £190mn has been pulled from a sample of property funds covered by fund trading provider Calastone since the fiscal statement, with the pace of withdrawals accelerating in the past week.
One UK-based private real estate investor with a multibillion-pound portfolio described property fund managers coming to him with a menu of buildings to buy.
“What the funds do with people they know and trust is give you the list of all their assets and see if you want them,” he said.
This story originally appeared on: Financial Times - Author:Adrienne Klasa
