Resumption of dealing in Janus Henderson UK Property fund

28 January 2021 – Janus Henderson has announced that dealing in the Janus Henderson UK Property fund will resume at midday on 24 February 2021.

Dealing in this fund and other open-ended property funds, was suspended in March 2020, because independent valuers were unable to value properties due to the ongoing uncertainties surrounding the impact of the Coronavirus.

In recent weeks the funds have started to lift suspensions and resume trading.

Commenting on the lifting of the suspension, a spokesperson said: “First and foremost, we would like to thank investors for their patience and continued support, and we apologise
for any frustration and inconvenience the dealing suspension may have caused.

“The dealing suspension allowed for an orderly sale of properties to raise cash to a level that is sufficient to cover known client redemptions, while also leaving sufficient ongoing cash to meet future redemptions post reopening. We are pleased with the pricing attained on the assets sold in the period since March 2020, with most sales exceeding 31 December 2019 valuations.

“We are comfortable that this was achieved without compromising the diversification and performance potential of the remaining property portfolio. In the current environment, our intention is to maintain a cash weighting in excess of 15%. This will, however, fluctuate depending on subscription and redemption levels and property transactions.”

In the period since dealing in the fund was suspended, 11 assets have been sold. The investment focus remains on holding a strong portfolio of defensive, core assets with a mix of robust tenants on long leases across all sectors.

More than a third of the income generated by the portfolio currently comes from leases with either fixed uplifts or inflation-linked increases, providing an element of rental growth. Rent collection remained strong in 2020 with 91.5% of rents due collected by 18 January 2021. The average lease term is 9.4 years and the void (vacancy) rate is 4.8%, well below the UK
Investment Property Databank (IPD) benchmark average of 9.3%^.

Darius McDermott, managing director of Chelsea Financial Services, said: “The lifting of the almost year-long suspension is good news for investors. To me, liquidity is key and there is plenty of that as cash levels are high.

“Janus Henderson, like other open-ended property fund managers, will have been in close dialogue with its largest investors to get a handle on possible redemptions once the suspension is lifted. So the company is now obviously confident that it can meet any such redemptions and avoid having to close again.

“Diversification within the portfolio remains strong, as does the income yield and potential for income growth in the future. Despite the obvious problems facing commercial property in 2020, rental collection was strong. The void rate, which has historically been lower than many competitors also remains low.

“We await the FCA’s decision on its consultation into property funds. Hopefully there will be an announcement soon and the sector can move forward in whatever guise is necessary.

“For diversification and income reasons I still believe the sector has a lot to offer investors.”

Published on 28/01/2021