Aviva property fund to be suspended for 6-8 months

Aviva has warned investors its property fund will remain suspended for at least six-to-eight months, after Brexit-induced concerns about property values led to a surge in redemptions.

Aviva Investors issued a note to investors on Wednesday saying the long time frame reflected the time it takes to sell commercial properties.

The insurer said it was temporarily suspending dealing in the Aviva Investors Property Trust, meaning "we cannot act on any instructions to buy, sell, transfer or switch units in the trust until further notice".

Analyst Laith Khalaf at Hargreaves Lansdown said he thought Aviva was the first property fund manager to have put a time frame on how long the trading suspension may last.

"This is a big blow to investors in the Aviva fund, who are basically now being told they won’t be able to get their money out any time in 2016," he said.

"The wider question is whether this time frame applies across the rest of the sector, and property fund investors would no doubt welcome similar guidance from other suspended funds as to when they might open again, so at least expectations can be set accordingly."

Aviva said the suspension was "likely to be in place for a period of at least six to eight months from the date of
suspension", which was 5 July.

"We will continue to monitor liquidity on a daily basis and are in regular contact with the trustee and depositary, Citibank Europe Plc, UK Branch, who is also monitoring the situation. We will, together with Citibank, agree the appropriate time to re-open the trust. We will confirm when the suspension is lifted on the Aviva Investors website and by writing to investors," the company added.