New Star Asset Management has slashed the value of its UK property by 8.2% to make sure it is in line with market sentiment, it revealed today.
In a statement to the Stock Exchange, the UK’s most high profile private investor property fund manager said that the fall in value was down to a 9.6% drop in capital values during the previous four months. It said that capital values in its New Star UK Property Unit Trust had fallen 17.8% since the end of July. The fund has returned close to -10% in the last three months.
It also said that its portfolio was being valued twice monthly whilst uncertainty over pricing continued to ensure that it was ‘as current as possible’, and that it would make ‘every effort to maintain the fund’s liquidity’.
‘In recent days sentiment has deteriorated sharply, partly as a result of the publicity given to redemptions from open-ended commercial property funds,’ New Star said.
‘This has stimulated further redemptions and heightened concerns about the liquidity of these funds. The New Star UK Property Unit Trust is, we believe, one of the most liquid of the UK open-ended commercial property funds.’
New Star has been the most high profile private investor property fund, with its distinctive blue and pink billboards springing up across the country as the man on the street became interested in investing in bricks and mortar.
At the height of the property boom in 2006, New Star was taking in more than £100m a month into its property fund. Today it said: ‘New Star has consistently emphasised that the case for investment in commercial property is portfolio diversification and income rather than short term capital appreciation.
‘We continue to believe that this investment case remains as strong as ever notwithstanding the recent short term falls in commercial property values.’