INDUSTRY NEWS

£2bn fund closed to ‘protect’ investors

Scottish Equitable has closed its property fund after it no longer had sufficient cash for investors, it has been reported.

The company announced there would be no further withdrawals available for up to a year and its reserve fund was at one per cent.

"Aegon UK has decided to take this step to protect investors following a significant level of customer withdrawals from the UK property fund market."

Commercial property in London is in some difficulty. Borrowing rates have risen since the US sub-prime crisis and a slowdown in consumer spending is keeping investors away from buying into retail property.

Globally, commercial property has proved to be a sound investment for many and the office market continues to weather the current economic storm in the UK.

According to NAI Global: "Property markets across the continent have been strong, although some shifts may occur as a result of overreaction to US sub-prime concerns."

Troubled lender Northern Rock is still waiting for a buyer and is currently borrowing government money so it can stay solvent.

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