Three major UK asset managers have limited withdrawals from their property funds, saying they are unable to handle heavy demand from investors.
Schroders, BlackRock and Columbia Threadneedle have imposed strict restrictions on redemptions from their real estate funds.
The £2.7bn Schroders Capital UK Real Estate fund received redemption requests totalling £65.3m in the second quarter of this year, which were due to be paid by 3 October. Schroders has paid £7.8m towards meeting the withdrawal requests and said the outstanding balance would be deferred until “on or before” 3 July next year, in line with rules that allow it to push back redemption requests by 24 months.
Columbia Threadneedle said volatile market conditions had forced it to switch from daily to monthly payouts. At the same time, BlackRock also imposed redemption restrictions on the £3.5bn BlackRock UK Property fund after receiving significant withdrawal requests in the second quarter.
The pressure on the funds has been caused by last week’s liquidity crisis adding to problems caused by rising inflation.
UK pension funds have been cutting real estate holdings for several months as rising rates and slowing activity have weighed on the property market. Tumbling prices of UK government debt have also increased the proportion of funds’ portfolios in real estate, prompting some to reduce their exposure.
