PrefBlog

The Great British Property Fund Debacle keeps getting worse:

The uncertainty sweeping across Britain’s commercial property market in the wake of Brexit has affected more funds, including a few owned by Canadian firms.

Bank of Montreal’s Global Asset Management adjusted its U.K. property fund because of an increased number of redemption requests after the June 24 referendum vote in Britain to leave the European Union.

On July 7, BMO’s asset management division announced that its F&C UK Property Fund had cut the price of its units 5 per cent. It said the change was a result of a move to “fair value pricing” that accounted for the uncertainty and downward pressure surrounding commercial real estate property values in Britain.

“The level of redemption requests we have recently received and market conditions suggest that investors may place further redemptions, leading to downward pressure on realizable property values,” the company stated on its website page for the fund, which invests directly in U.K. commercial real estate.

BMO GAM said it has also increased the frequency of valuations for the buildings owned in the fund from a monthly to a weekly basis as a result of the “significant market volatility” following the Brexit vote, requiring closer monitoring as a result.

Last month, BMO GAM’s fact sheet on F&C UK Property said the fund had a value of £305-million ($512.2-million) and a unit price of £110.80. On Thursday, the unit price had fallen to £98.43, a drop of £12.37 or 11.16 per cent.

This entry was posted on Friday, July 8th, 2016 at 1:17 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.