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Ares
20th March 2011, 07:49 PM
Fears of a nuclear crisis in Japan have spilled into the commercial property sector with a large German institution suspending a €2.2bn fund as it said its holdings in Tokyo were now impossible to value.

Union Investment, one of the largest German fund managers with €177bn under management, said that the nuclear fallout in Japan has made valuation of its properties too difficult as its surveyors had never had to deal with the threat of nuclear contamination before.

It said that while there is no physical damage to any of Union's Tokyo properties, the threat of nuclear contamination is unknowable.

It said that it therefore had "no option" but to freeze all buying and selling of units in its Unilmmo Global fund. This means investors can neither withdraw their money nor put any extra in.

In a statement yesterday, the fund manager – which has €19bn of its assets in real estate – said: "With the impact of the nuclear incidents in Japan still unclear, especially at the Fukushima plant, and the economic consequences impossible to predict at present, Union Investment Real Estate GmbH contacted its external experts to request a revaluation of its properties in Tokyo.

"The corresponding expert committee has today informed us that valuation is not possible at the present time given the exceptional circumstances prevailing in the area. Consequently, proper calculation of the UniImmo Global unit price is currently not possible."

If a daily price of a fund is unavailable, German market rules set by Bafin, the financial regulator, state that an open-ended real estate fund needs to be suspended, Union said.

A spokesman for Union Investment said: "We are in new territory here. We have insurance covering all our properties against earthquake damage and other disasters, but I don't think there is insurance available for the risk of potential nuclear fallout."

He added that Union hopes to be able to re-open the fund as soon as the situation becomes more clear; and this should not take more than one or two months.

David Rusholm, director of valuations for the Royal Institution of Chartered Surveyors, said that the institution provides guidance to property companies on “valuation uncertainty” through its Red Book. He said that the Red Book is being updated and will take into account the events of the financial crisis when valuations become difficult because of illiquidity in the market.

However, he added: “These are special circumstances. It is understandable that a company says it is impossible to provide accurate valuations in the short term. As soon as the situation is clearer, they should be back to business as usual.”

Several German real-estate funds suspended dealing and froze their net asset values when liquidity dried up during the financial crisis, though Union was not among them. This is the first time it has ever suspended a fund, and the first such suspension to take place for such an unusual reason, the Union spokesman said.

http://www.efinancialnews.com/story/2011-03-18/union-investments-nuclear-fund-suspension

Cebu_4_2
20th March 2011, 09:23 PM
WTF? Everything regarding news that is no longer posted on MSM is removed (redirected) to places no one really goes.

I believe we have been infiltrated people.

Glass
21st March 2011, 01:42 AM
In a market the "price" is set by a transaction between someone willing to buy and someone willing to sell. So either no one is willing to buy or willing to sell. The price is not set any other way? Or is it? So this article is bollocks. What he is saying is, we have discovered the price people are willing to pay is ZERO and we don't like that price. So until another price comes along that we do like we talking our bat and ball and flipping everyone the bird.

Spectrism
21st March 2011, 09:27 AM
It sounds like they are using the Amerikan market trick- eliminate mark to market rules. Just make the price whatever you want it to be.