St James’s Place has gated £3.6bn worth of UK property funds, becoming the latest investment manager to halt trading due to valuation concerns during the coronavirus sell-off.
The suspensions will affect its segregated mandates, which include the £1.3bn SJP Property unit trust, the £1.1bn SJP Property Life fund and the £1.2bn SJP Property Pension fund. The strategies are managed by Orchard Street managing partner Philip Gadsden.
The bulk of assets are in offices (39.6%), industrials (30.4%) and retail warehouses (19.1%). The fund holds 4.7% in high street retail, 3.3% in leisure and 2.9% in shopping centres.
This takes the level of assets trapped in the sector to close to £15bn.
SJP said it had suspended the commercial property range due to difficulties valuing the underlying assets, which a spokesperson for the wealth manager added “is a challenge for the entire property investment sector at present, rather than SJP funds in isolation”.
“Property fund valuers across the market, including our independent valuer CBRE, are currently unable to accurately or fairly value the properties within our property funds,” a spokesperson for the wealth manager said.
“A number of other commercial property funds have also suspended in recent days and this decision has been taken in our clients’ best interests’.”
SJP is the latest in a line of property funds to suspend in the past couple of days as the coronavirus has taken its toll on global markets.
So far 10 open-ended property funds worth more than £11bn have been forced to gate this week, including Legal & General, Columbia Threadneedle, BMO Gam, Aviva Investors, Janus Henderson and Kames Capital.
The £2.3bn M&G Property Portfolio gated in December due to Brexit and high retail exposure.
Only one of the mega property funds, Royal London Property, which does not have daily dealing, has yet to update the market about whether it will join the raft of suspensions.
