Abrdn-run property fund to be wound down after investors reject merger

abrdn Property Income Trust

27/03/2024 18:35

LONDON, March 27 (Reuters) - A 439-million-pound ($554
million) property fund managed by abrdn  ABDN.L  will be wound
down after a proposed tie-up with a rival fund failed to get
sufficient support from shareholders, the fund said in a
statement on Wednesday.
    Listed property funds have struggled in recent years as a
sharp rise in borrowing costs and emptying post-pandemic offices
have driven a slump in commercial real estate values and a surge
in clients pulling money from property-focused funds.
    The tough conditions have led some real estate funds to
pursue tie-ups to bolster their finances.
    Abrdn Property Income Trust (API)  APIA.L  said that while a
majority of its shareholders voted to back a merger with rival
Custodian Property Income REIT (CREI), the proposal failed to
reach the 75% support threshold required.    
    "In view of these results and the challenges that API would
continue to experience as a standalone company, the API board
will now take steps to implement a managed wind-down," API said
in a statement.
    API said it would aim to deliver "enhanced returns" to
shareholders, but a spokesperson said the returns from asset
sales would likely be lower than if they were marketed as
normal. The wind-down is also subject to approval from API
shareholders.
    CREI said in a statement that it was disappointed by the
outcome, but said the merger had not been critical to its
strategy.  
    ($1 = 0.7920 pounds)

 (Reporting by Iain Withers
Editing by Bernadette Baum)
 ((Iain.Withers@thomsonreuters.com;))