Henderson’s £4bn property fund suspended

Paul Milburn, investment analyst at Lowes Financial Management, said while investors have rushed to the door he has no plans to steer away from some funds in the property sector.

He said 75 per cent of the return from commercial property comes from rental income and rental income growth over the longer term, which he said is helpful for income producing portfolios.

“The suspension of the trading in these funds of course causes some concern, and highlights again whether funds with illiquid assets such as physical property should be daily pricing.

“For now we believe that the property fund managers have been prudent in their actions, by implementing the adjustments to the value of the underlying properties and by suspending trading, in order to provide more realistic valuations and protect the unit holders.

“For the moment, we will continue to allocate to our favoured property funds.”