More property fund managers have joined their peers in suspending trading on their UK property funds following a rapid increase in redemption requests since the Brexit vote on June 23.
The real estate investment management business of Canada Life has “taken the decision to immediately defer requests for withdrawals from our property funds” the firm announced on Wednesday. The firm blamed the “ongoing uncertainty around the pricing of commercial property assets following the vote to leave the European Union, and the recent rise in requests to withdraw (or switch) from the property funds” for the suspension of trading.
Similarly, Columbia Threadneedle also joined Aviva, M&G, Henderson, Standard Life in suspending trading on its Threadneedle UK Property Authorised Investment Fund (Threadneedle PAIF) and the Threadneedle UK Property Authorised Trust. “Because the purchase and sale of property assets can be a lengthy process, our portfolio managers maintain a cash balance in the fund to meet requests from clients who wish to sell their shares,” the firm said in its announcement. “We have not been immune to the recent trend of retail outflows from the sector and so far these requests have been met from the cash balance retained within the Threadneedle PAIF.”
Yet, some analysts are calling for calm among investors. Laith Khalaf, senior analyst at at Bristol-based financial services company Hargreaves Lansdown said: “Investors in commercial property funds should not make decisions in a panic. Granted the Brexit vote may have the potential to negatively affect the commercial property market in the short run, but long term investors should be willing to ride out periods of weakness, particularly when there has been such a sharp decline in fund prices without much evidence of a slowdown in the underlying property market.”