Henderson halts trading on UK property fund

Henderson Global Investors has become the fourth UK asset manager to suspend trading on its £3.9bn property fund in the wake of Brexit.

Standard Life Investments was the first to make the move on 4 July, followed by Aviva Investors and then M&G just over 24 hours later.

Henderson has suspended all trading on its UK Property PAIF and the feeder fund due to “exceptional circumstances”, the asset manager said in a note to investors.

The move was effective from 12 noon on 5 July and will cease “as soon as practicable”. Suspension will be formally reviewed at least every 28 days.

Uncertainty generated by the UK decision to leave the EU has had a negative effect on market sentiment and led to substantial withdrawal from property funds.

“A cash liquidity buffer is typically held to meet redemptions but the pace and size of redemptions has increased to abnormally high levels following the referendum result,” the note said.

“This has put exceptional liquidity pressure on the fund, exacerbated in recent days by the suspension of other direct property funds.”

Although the longer-term impact of the referendum result is still “unknown” Henderson said it is confident about the quality of the fund’s portfolio, as it is “well located with a good mix of tenants”.

“The fund continues to offer a net income yield of 3.2% (4% gross) which is attractive relative to other asset classes,” Henderson said.

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