Aviva Plc’s fund management arm will sell prime commercial real estate assets in Sydney and Tokyo after withdrawals by investors forced it to shut down its 159 million-pound ($248 million) Asia Pacific Property Fund.
The fund, which owns properties in Sydney’s central business district and offices in central Tokyo, was suspended from trading and it is slated to be wound up in August, a spokesman for the London-based company said Monday. Two of the pool’s largest investors, which together account for more than 75 percent of the fund, said they intend to pull out their money, the firm said, without identifying them.
The withdrawals “considerably reduce the fund to a size that we do not believe is viable for a fund of this nature,” Aviva Investors said in a statement. “Suspending dealing will enable the properties of the fund to be sold in an orderly manner which will help to maximize the sales values achieved.”
The fund’s holdings include real estate on Sydney’s Sussex and Castlereagh Streets and on the Finger Wharf, located at the city’s harbor. It also owns office space in Kanda Matsunagacho and Mitsui, Uchikanda in Tokyo and the Shore City shopping mall in Auckland, New Zealand.
The shuttering of Aviva’s Asia Pacific Property Fund comes after outflows from its U.K. property trust and a management reshuffle. Ian Womack, who had been chief executive officer of Global Real Estate, stepped down last month after 35 years at the firm to be replaced by Ed Casal. Fund manager Philip Nell also left for Hermes Investment Management’s real estate team. Aviva Investors oversaw 24.5 billion pounds of real estate assets at the end of March.
Aviva told the fund’s investors it would take between 12 to 24 months to shut it down and return money as it sells off the real estate and unwinds legal arrangements, according to a letter sent to clients.
“All investors, including the two largest, will have access to the proceeds of their investment at the same time,” Aviva said in the statement.
The closing of the fund was first reported by Investment Week.