The Royal Institution of Chartered Surveyors (RICS) reported today 9th September 2020 that the valuation uncertainty no longer applies to several areas of the UK property market,
Since the early summer RICS have been gradually removing Material Uncertainty Clauses MUCs from certain subsectors. In short, a protection for surveyors giving valuations in teh unprecedented times of coronavirus lockdown, empty commercial premises, that for for many are still empty. How do you value a property with all that has gone on?
Following the coronavirus pandemic, several funds across the Investment Association UK Direct Property sector remain suspended after independent valuers instigated MUCs with billions of pounds of investor capital locked up since early March 2020.
Although fund suspensions remain in place, RICS said: “in all UK real estate there no longer remains the same material uncertainty excluding some assets valued with reference to trading potential within some leisure and hospitality assets”.
We suggest property funds are unlikely to reopen thatquickly as they were suspended but whilst removing MUCs will allow funds to open again, it will still be at the discretion of the fund managers depending upon liquidity in the fund, rents received and how many 'switch out' requests investors have made. Property fund managers clearly do not want to be forced to sell a commercial unit at a lower than normal market value and lose value for their investors.