ING is close to completing the wind-down of its £200m central London property fund, one of the few property funds to be terminated during the market downturn.
The ING Central London Unit Trust, which at the height of the market owned London office property with a value of more than £200m, has one property left to sell, a recently completed development scheme at 60-62 St Martins Lane, WC1, which will be sold when it is let, probably before the end of the year.
The fund, which is managed by ING Real Estate Investment Management, had a termination date of April 2009, and investors decided to wind the fund up and sell its assets rather than extend its life.
This meant it captured the recent upswing in central London office values, and it will provide a positive return for investors over the period since its inception in 2002.
Data from the Association of Real Estate Funds shows that the fund has provided a total return of 71% in the year to 30 June, but a -27% return over the past three years.
A spokeswoman for ING said: “The ING Central London Fund was terminated in April 2009 in accordance with the funds’ agreements. The majority of investors did not vote for a continuance.
“However, it was agreed that the wind down would be executed over a period of time, allowing business plans to be completed and to take advantage of the anticipated market recovery.
“The majority of the portfolio was sold at the end of 2009 when the market was experiencing a significant upswing.
“Two assets – 147-155 Wardour Street and 60-62 St Martins Lane – were retained as asset management initiatives were still continuing. Wardour Street has since been sold, capitalising on the improvement in the West End investment market.
“The scheme at St Martin’s Lane was completed in April, and the residential, office and retail space is at present being marketed. The aim is to conclude strong commercial lettings by the year end to enable disposal of the final asset.”
So far since the downturn, most funds coming to the end of their life, such as the Ashtenne Industrial Fund and the Chiswick Park Unit Trust, have chosen to extend their life to try to improve returns rather than sell into the current market.
mike.phillips@estatesgazette.com
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