Reports in the Financial Times suggest that Columbia Threadneedle, Schroders and Blackrock have all moved to restrict withdrawals from property funds.
For example, Schroders confirmed that its UK Real Estate received redemption requests worth £65.3m in the second quarter of this year, which were due to be paid on 3 October. However, only £7.8m of this figure is being paid now, with the outstanding balance being pushed back until July next year.
Elsewhere, Columbia Threadneedle has moved to monthly redemptions, rather than daily, on its Threadneedle Pensions Pooled Property fund, which it put down to “liquidity constraints” as well as an increase in redemption requests.
A spokesperson said: “We believe introducing this procedure is in the best interest of investors in the fund, allowing for an orderly sale of assets to meet redemption requests. We aim to return the fund to daily dealing as soon as possible and will notify policyholders as and when this will be the case.”
The fallout from the government’s mini Budget saw a host of pension schemes ‒ which are significant investors in property funds ‒ look to sell their holdings in order to meet demands for collateral.
However, fund managers can experience difficulties in meeting these redemption requests given the illiquid nature of property investment.
Asset managers have previously had to impose withdrawal limits on property funds, for example following the Brexit vote and at the start of the pandemic.
