Union reopens global fund after revaluation of Japan portfolio

German fund manager Union Investment said on Thursday it has reopened its UniImmo: Global fund for redemptions following a three-month closure.

The reopening follows a revaluation of the fund's seven Tokyo properties on 15 June which resulted in a downward adjustment of EUR 26.5 mln. Taking into account an upward correction for a fund property in Singapore, the net valuation adjustment was EUR 20.2 mln, resulting in a unit price of EUR 51,60. The current 12-month performance for UniImmo: Global is -2.59 %, compared to -2.16% when the fund price was last calculated on 16 March 2011.

Union had commissioned external experts to revaluate the fund's Tokyo properties in March but they were thwarted by the nuclear accident at Fukushima and the consequences for the city's property market. 'Expert opinion is that the situation in Fukushima has now stabilised to the extent that Tokyo is extremely unlikely to experience radioactive contamination. The valuation committee has endorsed this assessment,' said Union Investment's management board chairman Reinhard Kutscher.

The valuation adjustment in Japan was largely offset by income growth and write-ups during the three-month closure period. The distribution for the 2010/2011 accounting year, which will take place on 28 June, is EUR 1.40 per unit, unchanged from the payout in the year-earlier period.

'The revaluation highlights the varying impact of the environmental and nuclear disaster on the Tokyo property market,' said Kutscher. 'Demand for earthquake-proof buildings in the five central districts of Shinjuku, Shibuya, Minato, Chiyoda and Chuo has increased following the accident, with rents bucking the trend and remaining stable. In contrast, rents in the outskirts and in retail properties and luxury apartments have come under additional pressure,' he noted.