Redemption orders placed for the real estate funds of OP Fund Management Company in the second half of 2024 to be paid out in July – markets show tentative signs of recover
Following the tentative signs of recovery felt in the real estate market, redemption orders placed in the second half of 2024 for the real estate special common funds managed by OP Fund Management Company will be paid out to investors according to the original schedule in July 2025. New redemption orders have been suspended since 31 December 2024. The temporary suspension of redemption and subscription orders for the special common funds and the 50% decrease in the management fees of the funds will remain in effect.
On 31 December 2024, OP-Public Services Real Estate and OP-Rental Yield special common funds suspended fund unit redemptions and subscriptions to protect the interests of unitholders. The reason for the temporary suspension is the current extraordinary situation in the real estate market. During the spring, there have been tentative signs of recovery in the market, and some of the sales defined in the fund's targets have been executed. As a result, redemption orders placed for the funds between 1 July and 31 December 2024 can be paid out according to the original schedule. These redemption orders will be paid out in July 2025.
"The decision to temporarily suspend redemptions and subscriptions was made to protect the interests of unitholders in exceptional market conditions. During the spring, there have been cautious positive signs in the market for large real estate assets, and this allows redemption orders placed in the second half of last year to be paid out according to the original schedule in July 2025. Despite this, the market conditions are still extraordinary, and the temporary suspension on subscriptions and redemptions to protect the interests of unitholders remains in place for the time being. This means that new redemption orders unfortunately cannot be placed at this time," says Juha Takala, CEO of OP Fund Management Company.
50% reduction in management fees to be extended
Despite the temporary suspension of subscriptions and redemptions for the funds, professional portfolio management of the fund continues normally.
"We halved the management fees of the OP-Public Services Real Estate and OP-Rental Yield special common funds as of the start of the year. The 50% reduction in management fees will continue for as long as the temporary suspension of orders remains in place," Takala says.
The majority of properties owned by both funds have tenants, and rental income has remained at a good level. The management and renting of properties and valuation, risk management, reporting and accounting related to the management of the funds continue normally during the temporary suspension.
"The suspension on redemptions and subscriptions is temporary. We are constantly investigating opportunities to carry out sales of larger real estate assets in a way that is aligned with the interests of the funds' investors," Takala says.
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