Investors are likely to be locked into Aviva’s £1.6 billion (€1.9 billion) property trust until the first quarter of next year at least, the fund management group has warned.
Aviva originally suspended dealing in the commercial property fund on July 4 this year, stating it needed time to sell assets and generate the necessary liquidity to fulfil the deluge of sales orders submitted by investors in the wake of the EU referendum.
In an update to investors, the firm states that property market uncertainty has impeded the sale of holdings, and the suspension is therefore likely to be in place for a period of at least six to eight months from its suspension date.
Since the June 23 referendum, over half the funds in the UK Investment Association property sector have suspended trading; Aberdeen’s funds resumed trading a month ago, but funds offered by Standard Life Investments, Columbia Threadneedle, Henderson Global Investors and M&G Investments all remain paused.
A spokesperson for the firm said it would continue to monitor the trust’s liquidity on a daily basis with fund depositary Citibank, and added that strategic changes made to the trust’s portfolio in recent years will help the fund weather the headwinds facing the UK real estate market. Recent UK Investment Association data indicated around £1.4 billion was withdrawn from property funds in June.
According to Morningstar data, the trust is down 4.5% in the three months to August 10, against a 2% gain in the IA Property sector.
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