Property funds and firms squeezed further as investors react to uncertainty
THE squeeze on property has continued following the success of the Leave campaign in the EU referendum.
St Modwen’s share price fell by a further 9% today after it warned it would take a “more cautious approach” as it adjusted to the uncertainty in the marketplace.
The property group’s value has fallen by £230m to £520m since the markets closed on June 23.
Non-executive directors Lesley James and Richard Mully bought 10,000 shares each today, at 240p and 230p respectively, before the shares closed at 235p.
Separately, trading was suspended on two more major property funds, following Standard Life Investments move on Monday.
Aviva Investors and M&G both announced they were taking the relatively unusual action in order to protect the interests of its investors.
It said this increased demand, along with “challenging market conditions in light of investor sentiment regarding the EU referendum”, was putting pressure on the assets it held in cash and equivalents. At the end of May this was £170m, accounting for 9.3% of the fund while it held a further 7.0% – £130m – in UK equities.
The Trust’s largest holdings include Colmore Gate in Birmingham, while it is also behind the speculative Apollo development at the Advanced Manufacturing Hub in Aston.
In a statement Aviva said: “As it takes time to sell property, we have had to suspend dealing until the amount of cash held in the Trust increases.
“Temporarily suspending dealing in the Trust enables us to manage this situation in a fairer and more controlled way. By taking a little longer we hope to sell properties at more competitive prices so that we can act in the best interests of all investors.”
M&G followed suit, suspending trading in its £4.4bn property portfolio, which had £350 in cash and equivalents at the end of May. Its portfolio includes the Gracechurch Centre in Sutton Coldfield while it is also the funder for the £200m development at Three Snowhill.
