Business News from Times Online
Anthony Bolton, the veteran fund manager at Fidelity International, is calling the bottom for property stocks and considering buying battered-down shares in housebuilders and retail companies. Speaking to investors yesterday at the annual meeting of his £400 million Fidelity Special Values fund, Mr Bolton said that he had bought into a number of well-known UK property stocks in recent weeks. News of Mr Bolton’s strategy came as a report revealed that prices of commercial property buildings had suffered a record one-month fall in November, twice as steep as the worst monthly price declines felt in 1990, at the depth of the last commercial property recession. Values of commercial buildings fell 4 per cent in November, bringing the three-month decline to 7.25 per cent, according to the Investment Property Databank (IPD). If price falls continue at the same rate then the value of offices, shops and warehouses could be 29 per cent down in mid2008 from their peak last summer. The share prices of Britain’s six largest quoted property groups - British Land, Land Securities, Hammerson, Liberty International, Segro and Brixton – have fallen on average by 45 per cent since January. Mr Bolton steps down from running both the Special Values Fund and Fidelity’s flagship £3.2 billion Special Situations Fund at the end of the month. He has run Special Situations since 1979, producing annualised returns of 20 per cent a year. Mr Bolton held a large weighting in property until earlier this year. British Land and Land Securities have been favoured investments. “Now with share prices falling, I’ve started to add back into this area,” Mr Bolton told investors yesterday. The sharp decline in quoted property stocks reflects fears that companies’ underlying building assets were overvalued. This summer’s credit crunch prompted the sudden withdrawal of the large numbers of leveraged buyers who had been propping up the investor market for the past two years. Their sudden absence caused investor demand to slump and capital values to fall, even though the rental market across offices, retail and industrial has held up. But price falls of individual assets, even after the release of yesterday’s IPD figures, are still far shallower than the declines marked down on property stocks, many of which have halved this year. This discrepancy has presented a