UK - Standard Life Investments (SLI) last week sold off a six-property portfolio from its Property Income Trust for £41.5m (€61.8m) – just days after it announced would cut the value of five of its property funds by 6.7%.
In an announcement to the London Stock Exchange on Friday, the firm it would use the proceeds of the sale, to an unidentified buyer, to reduce gearing and create a pool of capital for future investment.
Its earlier decision to cut the value of its property funds – collectively worth £4.5bn – came after several investors cashed in their holdings.
The investors’ sudden withdrawal "presumably reflects the fact that returns have gone from 17—18% to higher single digits", Peter Timberlake, head of media relations at the life and pensions firm, told IPE Real Estate.
"They’re rethinking the balance of their portfolios and moving out of real estate into other asset classes.
"We need liquidity in the funds to pay for the withdrawals so we need to sell assets – and you can’t sell a handful of bricks," he added.
That said, the fund manager remains relatively bullish over continued single-digit returns in the UK property market – at least in the short term.
SLI is keen to stress the sale of these properties is in no way related to pricing changes to Standard Life's life and pensions property funds.