* LGIM's 2.3 bln stg fund cuts value by further 10 pct, cuts
spread
* F&C's fund cuts value by 5 pct
* Kames cuts fund value by a further 5 pct
* CCLA cuts institutional fund value by 4.5 pct
* Aberdeen extends 24-hour fund suspension to next week
* Follows six funds suspending trading altogether
(Adds Kames cutting fund value, L&G moving to zero pct spread,
adds quotes, updates listed fund prices)
By Carolyn Cohn and Simon Jessop
LONDON, July 7 (Reuters) - Four fund managers cut the value
of their UK property funds and a fifth extended a 24-hour
trading suspension on Thursday, as the industry seeks to stem a
tide of redemption requests since Britain's vote to leave the
European Union.
A slump in the value of the pound and volatile stock markets
since the referendum on June 23 have unnerved investors who are
worried that the uncertainty will slow down business investment
in Britain and hit demand to rent and buy commercial property.
In recent years Britain's commercial property market has
exploded in value. Demand, centred on London, has come from
retail investors, pension funds, sovereign wealth funds,
insurance companies and private equity firms. From 2012 to 2014
the market grew 20 percent to 787 billion pounds ($1.02
trillion), according to data from the Investment Property Forum.
But in the last week more than 18 billion pounds ($23.26
billion) of retail investor cash has been frozen as funds run by
M&G Investments, Standard Life (LON:SL) Investments and Threadneedle
Investments, among others, suspended trading to allow time to
sell some of the buildings, a process which can take many
months.
The move to cut the value of a fund is a less extreme method
of controlling redemptions, as it effectively forces those
looking to leave to accept a lower price than was established
the last time the property portfolio was valued.
Three UK property funds aimed at retail investors, managed
by Legal & General Investment Management, F&C and Kames, said
they made cuts in the value of their funds.
Retail funds, including all seven which this week have
suspended trading, normally allow investors to take out their
cash daily.
Several firms which operate funds aimed at institutional
investors told Reuters they had made no changes, and had seen
little redemption demand from investors. These funds typically
only allow redemptions on a monthly or quarterly basis.
"There has been no immediate impact and we have not
witnessed an increase in redemptions from the fund's
institutional investor base, who it would seem are taking a
strategic view," said Howard Meaney, head of global real estate
- UK, at UBS Global Asset Management.
However, institutional investment manager CCLA, which
invests money for a range of charities, religious groups and the
public sector, also said it had cut the value of its funds since
the Brexit vote, by 4.5 percent.
"We felt that the...adjustment was an appropriate and
proportionate response to the heightened risk of uncertainty,
but not more than that," CCLA's chief investment officer James
Bevan told Reuters.
TIME TO RECONSIDER
This follows a decision by BlackRock, the world's largest
asset manager, to increase the redemption charges on its 3.3
billion sterling UK Property Fund, also aimed at institutional
investors, at its end-June redemption period.
Legal & General Investment Management, the fund arm of
insurer Legal & General LGEN.L , said it had cut the value of
its 2.3 billion pounds ($2.99 billion) UK Property Fund by a
further 10 percent, after a previous 5 percent valuation cut
following the vote.
It added later on Thursday that it had cut the offer spread
to zero on the fund for a "limited period". The fund normally
has an offer price to buy into the fund and a bid price to sell.
The offer price takes into account the costs of buying property.
"In normal circumstances the bid/offer spread is there to
cover any transaction costs associated with buying and selling
properties. However, as we have no plans to acquire any assets
in the short term, this is not currently relevant," it said in a
statement.
F&C, part of the fund arm of Bank of Montreal BMO.TO , said
it had cut the value of its 305 million pound UK Property Fund
by 5 percent as part of a move to fair value pricing.
Kames, owned by Dutch insurer Aegon AEGN.AS , said it had
made a further 5 percent cut in the pricing of its 409 million
pound ($529.37 million) UK property funds, bringing the total
cut in pricing to 10 percent since the Brexit vote.
Aberdeen Asset Management, which on Wednesday suspended
trading in its 3.2 billion pound UK property fund for 24 hours
and cut the value by 17 percent, on Thursday extended the
suspension until next Monday.
"Investors who placed trades yesterday have asked for more
time to consider whether to withdraw their redemptions,"
Aberdeen chief executive Martin Gilbert said in a statement.
However, listed real estate funds rose on Wednesday after
recent sharp falls.
Standard Life's listed real estate fund SLI.L closed up
3.66 percent, while F&C Commercial Property Trust FCPTL.L was
up 5.2 percent and the Schroder Real Estate Investment Trust
SREI.L climbed 5.7 percent.
Some long-term players said they may look to snap up
bargains.
"There may...be opportunities to add to property exposure at
lower prices over the next few quarters, once we have clarity on
the effectiveness of easier domestic policy and some kind of
political resolution to the current impasse over the UK's
relationship with Europe," said Trevor Greetham, head of
multi-asset at Royal London Asset Management.
However, Columbia Threadneedle Investments' head of
multi-asset Toby Nangle said in a note from fund tracker
Morningstar that he had "significantly reduced exposure to
commercial property" following the vote.
($1 = 0.7704 pounds)