Real estate investors are preparing for discount deals as property funds feel forced to sell offices and warehouses.
The funds have faced a wave of withdrawals following last month’s disastrous mini-Budget. They are now having to sell assets to meet redemption requests.
Large asset managers and cash-rich private investors are circling, preparing to buy up assets pushed on to the market as a result.
“The pension funds have already started making enquiries to companies they know can perform quickly that don’t need to go and get debt, that they trust can deliver,” said Tom Betts, director of structured finance at Topland Group, which has more than £1bn to spend.
A trustee at Airbus’s UK pension scheme said the fund would be looking to sell most of its property portfolio in the near future – though they insisted the scheme would not dispose of its illiquid holdings at a discount.
At the moment the market is semi-frozen, with a gap between buyers and sellers on what constitutes fair value, as investors’ costs rise but sellers refuse to budge on price. However, property funds may soon have little choice.
