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Property trust faces liquidation after failed fund raising

Property trust faces liquidation after failed fund raising

Investors in Global Real Estate, a closed-ended fund that invests in property securities, has abandoned its plans to raise £50 million.

The trust only announced on 19 November that it would be seeking to raise the money. ‘Despite demand from new and current investors, the board has determined that the initial offers would not have reached their minimum size and accordingly has decided that the company will not proceed with the initial offers,’ the trust stated.

The fund, which currently holds £62 million in assets, had intended to take itself over the £100 million threshold with the placing in order to improve its liquidity and meet the minimum size required by many investors.

The trust therefore confirmed that in January it would ask its shareholders whether or not it should liquidate its portfolio. It is also proposing to offer investors the option of making the fund open ended, or letting it continue in its present structure.

‘The board continues to believe that the global real estate market offers good value and growth prospects, particularly at this point in the economic cycle,’ it argued.

Investors in Global Real Estate – whose top holding is British Land – has produced a net asset value return of 0.7% over the past year. Its benchmark S&P Developed Property index has generated 4.2% over the same period, while TR Property – the only other member of the Property Securities sector – has returned 19.6%.

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