By ROBERT HARLEY 04/06/2009
We recently met the New Star UK Property team who are now established at new owners Henderson. We believe being part of a much larger property team is a positive development for the fund in terms of resources available and access to sector specialists at the company. Henderson currently have no equivalent offering in the retail space, consequently their intention is to retain the fund in its current form.
The current portfolio is well positioned for the downturn having been underweight retail and central London offices. Tenant quality is also high. Cash levels are 10% and listed equity exposure is now zero. Whilst the fall in bricks and mortar capital values is not over, the rate of decline appears to be slowing and current consensus opinion suggests that we may be within 5-10% of trough valuations. In view of the associated costs of selling at this point - the fund is still priced at the bid - and with some signs of life in the property market, we have introduced a hold rating for the fund.