The Skandia Property Fund, managed by ING Real Estate Investment Management, is tapping into its GBP 75 million war chest to buy undervalued property as the commercial property market stabilises.
ING REIM Fund Manager, Nigel Pickup has moved to buy Lakeside 5000, a modern office headquarters based on the Cheadle Royal Business Park, Manchester.
Over the past 18 months, investors have suffered from falling commercial property prices as economic conditions worsened. In response, Pickup maintained high levels of liquidity in the Skandia fund, prudently weathering the storm, helping the fund outperform the IPD UK Property Index by almost 8% over this period.
With signs that we may have seen an end to the extreme risk aversion that blighted 2008 and the first quarter of 2009, that liquidity is being put to good use to pick up bargains in the commercial property market.
The prudent approach taken by ING REIM over the past 18 months has been hugely beneficial for the fund, says Ryan Hughes, SIG senior portfolio manger. However, with investor sentiment improving strongly, it now appears to be an ideal time to utilise some of the cash held within the fund to pickup some attractive commercial property for the fund.
Since the beginning of Q2 2009 we have witnessed a marked change in investor sentiment with risk aversion much reduced, says Nigel Pickup, fund manager for the Skandia Property Fund. The change in this backdrop has provided an ideal opportunity to invest the current cash holdings and Lakeside 5000 offers the attraction of a strong income profile coupled with a strong tenant which should provide beneficial for the Skandia Property Fund in the coming years.
D.C.