Capital & Regional has become the latest real estate asset manager to be affected by the slowdown in UK commercial property. The company said on Friday that the value of units in its £3 bn shopping centre fund - the Mall Fund - fell by 12% in November, while the £1.3 bn retail warehouse Junction Fund dropped another 10%.
Capital & Regional has become the latest real estate asset manager to be affected by the slowdown in UK commercial property. The company said on Friday that the value of units in its £3 bn shopping centre fund - the Mall Fund - fell by 12% in November, while the £1.3 bn retail warehouse Junction Fund dropped another 10%.
On a geared basis the Junction Fund and the Mall fund are down 24% and 17% respectively so far this year, Capital & Regional said.
'During November there has been a significant downward movement in the value of the Mall and Junction funds, in line with current market sentiment. The reduction in capital values is likely to lead to a claw back of some of the performance fees earned in 2006', said Capital & Regional CEO Martin Barber. 'This claw back is payable by Capital & Regional Property Management to the funds, so we recover some of the cost as co-investor', he added. The company expects the net impact of the claw back on NAV will be between 30p and 50p per share.
The company's third fund, X-Leisure, has performed much better as its portfolio dropped just 0.5% ungeared and 1% geared last month.