Investment Property Databank (IPD) has calculated that the difficulties at UK retail chains Woolworths and MFI have had limited effect on the IPD's quarterly benchmarked property funds.
Investment Property Databank (IPD) has calculated that the difficulties at UK retail chains Woolworths and MFI have had limited effect on the IPD's quarterly benchmarked property funds.
The aggregate exposure to the two retailers is less than 1% of total current income - with Woolworths contributing slightly more (56 basis points) and MFI marginally less (33 basis points) to this total, according to IPD's Rental Information Service (IRIS).
Woolworths, which operates over 800 high-street stores in the UK, and Kitchen seller MFI, which has 200 stores, both filed for administration last week.
IRIS, which analyses portfolio cash flow strength and relative market risk, comprises 218 property funds with an aggregate rent paid of about £6.3bn (EUR7.4 bn) as at the end of September 2008. Within this universe, 82 property funds, or 38% of the pool, have some exposure to the two fallen retailers. Ten funds, 5% of the pool, have exposure of more than 5% of their total rental income. The aggregate capital value of the IRIS data universe was £103 bn as at the end of September 2008.
Speaking from the IPD/IPF UK Property Investment Conference in Brighton, Laurent Ternisien, managing director of IPD said: 'It is particularly important, at this point in the property cycle, for real estate investors and fund managers to gain access to accurate information and analyse the security of cash flow for income return as it is becoming the most critical component of overall performance.'
