Aviva Investors' Luxembourg-domiciled European Property Fund (EPF) has temporarily suspended dealing to safeguard investor interests in a turbulent market.
Dealing has provisionally ceased because weaker market conditions have led to a lack of liquidity in the fund, according to Ben Stirling, managing director continental Europe real estate at Aviva Investors.
“The European commercial property market has slowed and it is taking longer to turn properties into cash at acceptable prices. At the same time, redemptions have been running at high levels,” he said.
A number of European real estate funds have suspended in the last few weeks due to market difficulties, he added.
Consequently, the EPF will not meet redemption requests until the liquidity position in the fund has improved sufficiently to meet requests. Redemption instructions will be held on file and executed on the first day of dealing following the end of the suspension period.
Normal trading for the EPF will resume as soon as possible, the firm added.
But it predicts property values in continental Europe will continue to experience downward pressure for the first half of 2009, with an expected recovery in 2010.
The non-Ucits Sicav had €387m AUM at 3 October, with 14 properties in its portfolio, invested across seven countries. The dominant geographical portfolio position is France, with 39.2% of holdings, followed by Sweden with 25.2%.
Just over 72% of the portfolio is invested in offices, with the remainder in warehousing and retail. Approximately 91.4% is invested in physical property, while 8.5% is held in cash.
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