Aberdeen Asset Management is planning to launch a British property fund to buy into a commercial property market that it believes should bottom out from the middle of next year. The Times
The fund could be raised as early as next spring and will have at least £100m of equity raised from a small number of institutions. Aberdeen’s move comes amid growing fears that prices of British shops, office and warehouses will have fallen on average by 25 per cent from their peak this June to the end of 2008, based on current trading in the property derivatives market.
Prices of some out-of-town properties are thought to have retail fallen by 20% already and could end up down more than 30% from their peak if, as is widely expected, a sharp fall in consumer spending hits rental growth.
Confirming Aberdeen’s intention to raise money for a new UK property fund, Glenn Newson, the managing director of Aberdeen Property Investors UK, said: 'Our intention is to raise funds and provide property returns for investors.'
He admitted that Aberdeen, which manages £100bn of funds, may find it 'challenging' to raise debt as early as the second quarter next year for. 'We do not need necessarily to include an element of debt. Debt has its place, but only if it is performance enhancing - and I do not see it being so for the next 18 months.'