Perspectives · Real estate · 2026

Why property funds limit withdrawals

A building cannot be sold in an afternoon. An open fund that owns property and lets investors sell units at regular dates is therefore making a promise about access that the underlying assets cannot always support.

Managers deal with this in several ways: by holding a cushion of cash, by setting caps on how much can be withdrawn in a month or a quarter, by asking for notice, and, in the most severe cases, by suspending dealing. The archive has examples from the UK in 2019 and from a large non-traded US fund in 2022.

None of these tools is a defect. They are what protect investors who stay from a forced sale at a poor price. The point for an investor is to read the withdrawal terms before investing, and to treat property funds as holdings whose exit may take time.

General information only; not investment advice. Read the risk warning.