Leading commercial propertyinvestment managers Schroders has cut 12.5 per cent off the value of units in its £2 billion fund – as fears of a sector collapse escalate.
The company has told investors that they might have to wait longer than usual to withdraw their money, as the market could soon suffer a serious downturn in fortunes. The announcement refers to the Schroder Exempt Property Unit Trust, which is one of the leading performers in the sector.
William Hill, Schroders’ head of property, commented: " Our view, supported by the independent valuer, is that there is clear evidence that the market is now trading at some ten per cent to 15 per cent less than its peak and we have therefore set the redemption price at 12.5 per cent below the September valuation
"The market has moved and there is nothing to be gained by us putting our heads in the sand and pretending otherwise."
Investors are normally asked to give three months notice before they withdraw funds, but they are usually given the value of their units on the day they hand in their notice.