Three of the biggest providers of the funds – which offer investors returns from commercial property – have now frozen trading after Standard Life suspended its £2.9bn United Kingdom property fund on Monday.
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The group’s Property Portfolio fund has managed assets totalling pound sterling4.4 billion ($5.8 billion, 5.2 billion euros).
Earlier, Standard Life Investments had also suspended trading in its £2.9 billion United Kingdom property fund citing similar reason of “exceptional market circumstances” due to European Union referendum.
Many funds contain clauses which allow a manager to suspend dealing in exceptional circumstances, if it is deemed necessary in order to protect the interests of investors.
Bill Oliver, chief executive of St. Modwen Properties, said that recent events in the market reflect the fact that “we are now operating in a period of uncertainty in relation to many factors that impact the property market”.
Standard Life Investments made the same move on Monday when it halted dealing in its £2.7 billion UK Real Estate fund.
These funds all invest exclusively in either the Aviva Investors Property Trust or the M&G Property Portfolio and its feeder fund, all of which were suspended earlier this week.
Henderson, Canada Life and Threadneedle became the latest on Wednesday to close thir doors to traders looking to sell.
Meanwhile, Aberdeen Asset Management extended a suspension of its fund.
M&G Investments and Standard Life Investments just got a taste of their own medicine, and it’s bitter.
A spokesman for Aberdeen said the company has no plans to suspend trading in its funds, saying that redemptions have started to slow and its United Kingdom property fund holds about 20% in cash.
In so doing, they join three competing funds – M&G, Standard Life Investments and Aviva – that suspended their trading earlier in the week.
Prudential has suspended investments and redemptions in its single-asset unit-linked property funds following a wave of high-profile fund gatings.
More than half of the £25 billion of funds committed to commercial property by retail investors is now locked down by managers, who are under pressure to sell buildings to raise cash.
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Although it did not impose a full-scale indefinite suspension of trading, Aberdeen Asset Management on Wednesday put a 24-hour freeze on withdrawals from its Aberdeen UK Property Fund. “At this time it is still hard to predict the exact impact of the vote to leave and subsequent market events on commercial property values”, LGIM said in a statement.
