Boris Johnson and his new government’s “hard-ball” attitude towards Brexit negotiations has increased the risk of “economic harm” to tenants, AEW’s UK Core Property Fund has said.
In its second quarter update for the fund, AEW said it saw further “signs of capitulation” in the retail sector, with early forced sellers emerging.
However, the fund, which delivered a “reasonable” second-quarter performance, added that it was “happy” to hold on to the majority of its retail assets due to good levels of tenant demand or higher alternative use values.
The fund, which launched in the first quarter of 2012, has a net asset value of £301.5m, a triple net initial yield of 6.27% per annum and a reversionary yield of 8.03%.
It currently holds 64 properties, the majority of which are in the South West (21.61%) and the West Midlands (18.07%).
Against the MSCI/AREF UK Quarterly Property Fund Index, the fund was the top performing balanced fund over one, three, five and seven years, with an annualised total return of 7.3%, 10%, 11.8% and 13.1% respectively.
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