Aviva Investors has become the latest asset manager to suspend its property fund as a result of valuation uncertainty arising from the coronavirus outbreak.
The firm said on Wednesday the independent valuer of the Aviva Investors UK Property fund and its feeder funds, Knight Frank, had expressed “material uncertainty over their valuation of scheme property”.
A statement on the firm’s website said: “The Covid-19 virus has impacted the UK property market and made it difficult to value the property owned by the funds with the same degree of certainty as would otherwise be the case. As a result, the standing independent valuer has advised us that there is material uncertainty for all assets associated with future valuation.”
Aviva Investors said it believes therefore there is a material risk that investors may buy and sell shares/units at a price which does not fairly reflect the value of those shares/units.
“If we allow dealing to continue some investors may be advantaged at the expense of others,” it said.
A spokesperson for the firm said: “Although there is sufficient liquidity in the fund, we have acted to safeguard the interests of all our investors by suspending dealing in the fund with immediate effect. We will look to lift the suspension as soon as it is appropriate to do so.”
Dealing in the funds will be suspended with effect from the 12pm valuation point on 18 March.
It follows the suspension of the Kames Property Income fund and the Janus Henderson fund, which both suspended for similar reasons.
It is anticipated other open-ended property funds will follow suit and suspend trading.
The Aviva Investors UK Property fund owns a range of UK commercial properties including offices, high street shops, shopping centres, out-of-town retail parks, distribution warehouses and leisure facilities.
