Cromwell puts fund on hold
Cromwell Group has temporarily suspended all applications to and withdrawals from the Cromwell Property Fund (CPF) due to increasing property valuation uncertainty.
“The board believes it to be in the best interests of investors to temporarily suspend CPF applications and withdrawals because of increasing uncertainty around property valuations and the resulting difficulty in continuing to ensure accurate unit prices,” said Cromwell chief executive Paul Weightman.
The board will review the position monthly and will re-open the CPF to applications and withdrawals as soon as it sees appropriate.
A statement from the group said it expects there to be further uncertainty over property valuations in the next few months. It anticipates there will continue to be relatively few property transactions in the near term. However, there is the expectation the transactions that do occur will reflect a higher proportion of distressed selling. This has the potential to have a negative impact on valuations in the short term, which could advantage or disadvantage investors if applications or withdrawals occur at prices that cannot be supported by market evidence or are potentially distorted by current market conditions.
“Cromwell sees the current uncertainty in the property market and the potential for distressed sellers as providing the group with significant buying opportunities,” Weightman said.
He said Cromwell expects to be able to offer investors single property syndicate opportunities before the end of the financial year, which will in turn generate upfront and recurring funds management income for the group.
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