London: Crisis real estate funds, the first signals of the collapse?

The stop to the repayments of the British Real Estate funds is spread in a domino effect that seems, at the moment, unstoppable. After Standard Life, it was the turn of Aviva and then, in the late afternoon of a difficult day for securities listed in the Real Estate, M & G headed by the Prudential Group. The threat now hangs over all the giants of the City investing in bricks and mortar. Commercial, for the moment at least.

"Extraordinary market conditions, Aviva explained in a press, have produced immediate liquidity shortage in the Investors trust property of the group. The suspension of redemptions will give us the means to manage an orderly sale of assets and satisfy our investors. "The tone is similar to that of the Standard Life Fund size, however, less than 2.9 billion pounds: that of Aviva worth 1.8 billion. Much more significant, however, the hand that plays M & G, an expression of the fund management of Prudential. The group has suspended the fund repayments by £ 4.4 billion exposure in commercial property. Specifically, M & G has invested in 178 office buildings, department storage, shops. "The investor redemptions – the company has said – have greatly increased the climate of uncertainty in the context of the British commerical real estate triggered by the outcome of the referendum."

The speed with which investors have applied for redemption, has put in serious difficulties the three operators, unable to sustain the pace of liquidations. The effects of Brexit are evident as well in real life: the International Monetary Fund predicts that already in 2017 London will enter a phase of negative growth which will see its first consequence the decrease of the values of shops and offices.