Fund manager M&G, previously part of Prudential, temporarily suspended dealing in its M&G Property Portfolio Fund and feeder fund last week after a sharp rise in investor withdrawals.
M&G blamed Brexit uncertainty and problems on the UK High Street for its decision.
Prudential and M&G recently demerged.
Prudential also announced on Friday that it was planning to close a number of smaller life funds and move investors to bigger internal funds although the property fund suspension is not believed to be connected to this separate move.
Commenting on the Pru property fund suspensions Adrian Lowcock, head of personal investing at investment platform Willis Owen, said there were concerns of a “domino” effect similar to the one the sector saw in 2016.
He said: “This suspension could send shockwaves through the sector and have a domino effect on the remainder of the funds.
“There is over £15bn invested in direct property funds available to individual investors, but so far only one group is affected, as the Prudential fund has links with the suspended M&G fund and is therefore directly impacted by its suspension.
“However, this is a sector which cannot cope with large withdrawals in a short space of time, and contagion risk is very real.”
Prudential has been asked for comment on its fund suspension.
Separately Prudential has also announced the closure of a number of smaller life funds.
It said: “We’re closing funds where the fund is too small for us to continue to offer it, or where we have other similar funds available.”
It said in most cases replacement fund costs would be the same or lower but that has not been possible in some cases where investors potentially face higher charges.
The funds affected are in the Life Series 1 to 5.
Details are available on the Prudential website.