Legal & General Investment Management, abrdn, Columbia Threadneedle and Royal London all told Investment Week their funds were stable and they remained confident in them.
However, the funds have all seen continued outflows, with some not receiving a single month of inflows over the last three years, according to data from Morningstar Direct.
Only one of the 18 funds covered by Morningstar Direct in the IA UK Direct Property sector received inflows during September 2023 – VT Redlands Property Portfolio.
Throughout September, the sector lost £97.4m to outflows, with almost half (£43.2m) withdrawn from the abrdn UK Real Estate fund.
Across the last three years, the funds have seen a cumulative near £5bn withdrawn by investors, the data revealed.
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A spokesperson for Columbia Threadneedle Investments said the firm was “committed to offering our clients choice”, through either “a listed commercial property vehicle, a blended physical and property securities fund, pure property securities funds, segregated mandates or via our two open-ended UK property funds”.
The firm runs two open-ended UK property funds, the £215m CT UK Commercial Property fund, run by Guy Glover, and the £312m CT UK Property Authorised Investment fund, run by Gerry Frewin.
However, the two funds have seen substantial outflows over the last three years, with the CT UK PAIF not receiving a single month of inflows in the period.
The fund has dropped in size by almost two-thirds, with outflows totalling £651m since October 2020, according to data from Morningstar Direct.
Meanwhile, the CT UK Commercial Property fund has seen £277m withdrawn over the last three years, falling substantially from its £478m AUM in October 2020.
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An abrdn spokesperson said its UK Real Estate fund “benefits from a stable investor base” and has been able to maintain a healthy liquidity position – 16.3% as at the end of September 2023.
The fund has only seen minor outflows over the past three years, totalling £38m, but has still significantly reduced in size, falling from £1.6bn in October 2020 to just over £1bn today. It has only enjoyed three months of positive flows over the last three years.
The L&G UK Property fund and its feeder fund also remain open to investors, according to a spokesperson, who noted “fund size and liquidity remain stable”, as cash and real estate investment trusts comprised14.2% of the portfolio at the end of August.
The fund has seen a cumulative £829m in outflows over the last three years, halving in size from £2.8bn to just £1.4bn.
Mike Barrie, director of fund management for LGIM Real Assets, said: “We remain committed to providing investors access to the sector, as well as LGIM’s award-winning property fund management expertise, via robust products that are fit for purpose and within the remits of the regulatory landscape.
“Relative to other asset classes, we believe that the UK property sector remains an attractive diversifier in any balanced portfolio, and is well positioned for investors with long-term horizons.”
Royal London Asset Management also continued to back its £386m Royal London Property fund, which caters towards more institutional investors than retail investors.
A spokesperson for the asset manager said: “Given the institutional and stable nature of its investor base, drawn from life funds, defined contribution, and defined benefit pension funds, Royal London Asset Management remains confident in its suite of property funds.”
