The fund is one of three suspended by fund managers today and means that over half of the £25bn IA property sector funds by value have been suspended. Henderson and Canada Life also suspended trading in property funds today and Standard Life, M&G and Aviva Investors suspended funds earlier this week.
The Columia Threadneedle suspensions mean that investors are unable to buy or sell shares in the Threadneedle PAIF or its Feeder Fund. The fund manager says this action has been taken following approval by the funds’ depositary, Citibank Europe Plc, UK Branch, and the FCA has been notified.
Columbia Threadneedle says it has, “not been immune to the recent trend of retail outflows from the sector and so far these requests have been met from the cash balance retained within the Threadneedle PAIF.
“However, it is expected that these requests to sell will continue for the time being due to uncertainty in the market following the UK Referendum result, therefore the temporary suspension of dealings allows sufficient time for the orderly sale of assets, and protects the interests of all investors.”
The funds invest in physical UK commercial property such as warehouses, shopping centres, high street shops and offices around the UK. The fund has minimal exposure to large Central London properties.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Over half of the property fund sector is now on ice, and will remain so until managers raise enough cash to meet redemptions.
“To do that they need to sell properties, and as any homeowner knows, that is not a quick or painless procedure. These funds are therefore likely to be closed for weeks and months rather than simply a matter of days. Clearly there has been a knee-jerk reaction to Brexit in the commercial property sector, which may moderate over time.”
However, Mr Khalaf cautioned that there was no need for panic.
He added: “Investors in commercial property funds should not make decisions in a panic. Granted the Brexit vote may have the potential to negatively affect the commercial property market in the short run, but long term investors should be willing to ride out periods of weakness, particularly when there has been such a sharp decline in fund prices without much evidence of a slowdown in the underlying property market.”