LONDON, March 27 (Reuters) - A 439-million-pound ($554 million) property fund managed by abrdn 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) 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.
Abrdn (ABDN)
Abrdn Property (API)
