Capital & Regional, the co-investing property fund manager, admitted today that it would have to pay back performance fees earned in 2006 because of ‘significant’ drop in the value of its two large funds in November.
Chief executive Martin Barber said the clawback of fees would be between 30p and 50p a share. The news, however, had little impact on Capital & Regional’s share price this morning, as investors had factored in the clawback. This year the shares have plummeted 68% from 1542p to 490p.
Capital & Regional’s Mall and Junction funds suffered huge valuation falls in November, their worst-ever monthly performance. The Mall’s shopping centre portfolio dropped 5.5% on an ungeared basis and 11.2% on a geared basis.
The Junction retail park fund dropped 5.3% ungeared and 8.3% geared. The accumulated valuation falls in the first 11 months are 17% at the Mall and 23.7% at the Junction.
Capital & Regional’s third fund, X-Leisure, has performed far better. Its portfolio dropped in November by a meagre 0.5% ungeared and 1% geared. In the first 11 months it has risen by 2.7%.
‘During November there has been a significant downward movement in the value of the Mall and Junction funds, in line with current market sentiment,’ said Barber, although he added: ‘The tenant market has been healthy’.