Liquidation of Aegon AM Property Income fund to take longer than 24 months

investmentweek.co.uk:

As of 23 June, the fund redistributed £296m, representing 78% of NAV on closure

When the fund officially closed on 9 August 2021, Aegon AM expected to liquidate the strategy by August 2023, but the company admitted it may need longer.

The fund still has three properties in its portfolio: a Premier Inn in Preston, a property in Birmingham and building containing luxury apartments in London, according to the fund's May factsheet, all of which have not yet been sold, meaning the expected August 2023 deadline is likely to be missed.

Aegon Property Income wind up records first quarter with no distribution

The Preston Premier Inn faced hurdles after cladding was found on the building in 2021, forcing then-owners Kames Income Property fund — now Aegon Property Income fund — to apply to the city council at the time to obtain a certificate to replace the cladding with upgraded panels.

When approached by Investment Week, Aegon AM said it expected the liquidation process to take up to 24 months from the fund closure, but due to the current issues in the property space, it may take longer. It added all three properties are currently under offer.

As of 23 June, the company had given back £296m across seven pro-rata distributions, representing 78% of the net asset value on closure, it said in an investor update last month.

The eighth pro-rata distribution to shareholders started on 27 June, where the asset manager set out to give back £13.8m — around 40% of the value of the funds as of 15 June.

Additionally, from 1 March 2023, Aegon AM waived its entitlement to an annual management charge until all funds have been redistributed.

Between April and June 2023, the fund sold one asset for £10.5m, with the remaining three still unsold,