Spooked investors withdrew £2.2bn from property funds in 2019

Spooked investors withdrew a record £2.2 billion from UK property funds last year, with the sector hurt by political uncertainty and the suspension of trading in an M&G portfolio.

Data from funds transaction firm Calastone showed the biggest monthly dash for the exit in 2019 came in December, when outflows totalled £314 million.

That was the second-worst month for withdrawals since the firm began recording the real-estate data in 2015.

M&G temporarily suspended trading in its £2.5 billion property fund last month, after it could not sell buildings fast enough to meet redemption requests. Investors were spooked by political uncertainty and a weak retail property market. The withdrawal ban is still in place.

Edward Glyn, head of global markets at Calastone, said the “suspension of a major fund” in December “has only spurred further outflows from the sector”.

Glyn added that demand for commercial property has suffered from Brexit uncertainty “because it is so firmly rooted in the UK economy”.

However, he said property is a “structurally sound” investment for the longer term.