Legal & General and Aberdeen Asset Management have lowered the discount applied to investors wanting to exit their open-ended UK property funds.
The move reflects a relative recovery in the market, with fund managers confident they can reduce the disincentive to remove money.
Aberdeen has been in discussions to sell around £500m of assets from its £2.7bn UK Property Fund since it was forced to temporarily close to redemptions on 6 July. It has now reduced its redemption discount from 24% to 13.3%.
Both figures include a 7% discount to the value of the underlying property portfolio. This week Aberdeen announced the sale of its largest asset from the fund, 355-361 Oxford Street, W1, to Norges Bank Real Estate Investment Management for £124m, a 5.1% yield.
Martin Gilbert, chief executive of Aberdeen, said the move reflected “the reduced levels of redemptions the funds have seen and the rebuilding of the funds’ cash levels. Our hope is that trading in the funds continues to revert to more normal levels. This should allow us, in time, to remove the dilution adjustment altogether.”
Legal & General has reduced the discount on its £2.5bn UK Property Fund from 15% to 10%.
It said: “Conditions in the market and within our peer group have begun to stabilise.”
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