Standard Life, Legal & General Join Property-Fund Sales Rush

Standard Life Investments and Legal & General Group Plc have joined the list of U.K. real estate fund managers offering buildings for sale after the U.K.’s vote to leave the European Union sparked an increase in redemptions.

The asset managers are working with brokers to sell London office buildings, joining Henderson Global Investors and Aberdeen Asset Management Plc in moving to sell properties to raise cash. Aberdeen reopened its U.K. Property Fund and feeder trust on Wednesday following a week-long suspension. That was after redemption requests soared across the industry on concern that Brexit will hurt property prices.

The managers of seven funds, including Standard Life, with about 18 billion pounds of assets suspended trading last week to preserve cash levels and avoid a fire sale of commercial real estate assets. Legal & General, which did not halt redemptions, and Aberdeen cut the value of their funds by at least 15 percent. The requests will lead to about 5 billion pounds ($6.6 billion) of commercial-property sales, Jefferies LLC analyst Mike Prew wrote in a note last week.

For a QuickTake explainer on property-fund redemptions, click here.

Standard Life, the first manager to suspend trading in its 2.7 billion-pound U.K. Real Estate PAIF on July 4, has hired broker Jones Lang LaSalle Inc. to offer 48-54 Charlotte Street in the Westminster district, a spokeswoman confirmed. The building is valued at about 26 million pounds.

L&G will sell Garden House on Throgmorton Avenue in the City of London district, according to a person familiar with the matter. The building is valued at about 34 million pounds and JLL will broker the sale, the person said, asking not to be identified because the plan is private. A spokeswoman for L&G declined to comment.

Ryder Court

More than 650 million pounds of assets have already been offered by asset managers since the Brexit vote. They include Ryder Court in St. James’s and 440 Strand which are being sold by Henderson, people with knowledge of the plan said. Aberdeen Asset Management is offering at least three properties including 10 Hammersmith Grove for sale.

“The market may take time to find its level, but I have no doubt that property will continue to play an important part in investors’ portfolios,” Aberdeen Chief Executive Officer Martin Gilbert said in a statement on Wednesday. Spokesmen for Henderson and Aberdeen declined to comment on the specific asset sales.

The uncertainty caused by the Brexit vote “will cause many investors to hold fire on non-prime purchases for the next few months,” Kiran Raichura, property economist at Capital Economics Ltd., wrote in a note Tuesday.

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