British property still liquid despite European woes
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Direct property funds in Britain still have an abundance of liquidity and capital, despite the suspension of property funds in troubled continental Europe.
In November, Axa Investment Managers Deutschland continued the suspension of unit certificates in its AXA Immoselect investment fund for a further 12 months.
Achim Gräfen, the managing director of AXA Investment Managers Deutschland, says the continuation of the suspension stems from difficulties selling real estate at attractive market prices and creating sufficient liquidity for the fund. (article continues below)
In Britain, meanwhile, lessons were reportedly learned from the crash in 2007 and 2008, which has led direct property funds to accumulate excess liquidity.
Ross Henderson, a property fund manager at OPM Fund Management, says that such funds remain prudent in the wake of the crash and that a 15% weighting in cash is considered a general rule.
However, similarities in real estate values mean funds in Britain are finding a shortfall of investment opportunities.
Research by the Royal Institution of Chartered Surveyors (Rics) also reveals that 44% more chartered surveyors reported prices fell rather than rose in November, a slight improvement on October’s net negative balance of 49%.
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