Cited by Bloomberg, Aviva said in an email that "market circumstances, which are impacting the wider industry, have resulted in a lack of immediate liquidity" adding that "we have acted to safeguard the interests of all our investors by suspending dealing in the fund with immediate effect.... Suspension of dealing will give Aviva Investors greater control in managing cash flows and conducting orderly asset sales in order to meet our obligations to investors.”
As Laith Khalaf, a senior analyst at Hargreaves Lansdown cited above, put it, “the dominoes are starting to fall in the U.K. commercial property market, as yet another fund locks its doors on the back of outflows precipitated by the Brexit vote. It’s probably only a matter of time before we see other funds follow suit."
We could not have said it better ourselves.
“Standard Life’s decision to close its fund to redemptions concerns us. There is clearly fear that prices tomorrow will be substantially lower than prices today,” said Robert Duncan, analyst at Numis Securities. “Clearly the pace of redemptions has taken the fund by surprise.”
The announcements by both Standard Life and Aviva quickly impacted other commercial property funds: Legal & General dropped 5.6 % by midday, Aberdeen Asset Management shares were down 6.1% and Standard Life lost 3.5%. Land Securities, the UK’s largest property company, dropped 4.3%.