Abrdn Property Income Trust will soon ask shareholders to approve a change in its investment policy so it can be wound down.
The changes would involve realising all the assets in the portfolio, repaying borrowings and making timely returns to shareholders.
A notice of a general meeting, to be held at the end of May, said the board believes a managed wind down is the best deal for shareholders.
James Clifton-Brown, chair of the trust, said: "API has consistently sought to invest in good quality assets that produce an attractive level of income and which also have the prospect of income and capital growth, resulting in an attractive portfolio and consistent outperformance against the benchmark at the property level.
“Nevertheless, API, along with other Reits and diversified investment trusts, continues to contend with the significant challenges facing the real estate sector which in API's case are compounded by the relatively small scale of the company, resulting in a sustained and substantial trading discount to net asset value, low share liquidity and a concentrated debt structure.”
The proposed wind down comes after a planned merger was not backed by shareholders.
Overall, 61 per cent of shareholders voted in favour of a takeover by Custodian Reit which fell short of the 75 per cent majority needed.
The required change to the investment policy depends on the approval of shareholders.
The return of proceeds to shareholders is expected to take place over an 18 to 36 month period and at an appropriate point a liquidator will be appointed, subject to shareholders’ approval.
Clifton-Brown added: “Pursuant to its comprehensive review of API's strategic options, and consistent with its previous announcements, the board believes that a managed wind-down is now the best means of maximising value and unanimously recommends that API shareholders vote in favour of the proposed change to API's investment policy at the forthcoming general meeting."
If the change is approved, the board intends to reduce its investment manager’s fee to 0.2 per cent paid quarterly in arrears and the firm aid it would invest these fees in the ordinary shares while the share price remained at a discount.
The general meeting is set to take place on May 28 at 10.30am.
tara.o'connor@ft.com
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