Liquidity may not be the real cause for redemption changes to the property sector.
Liquidity is not an issue affecting the property sector as a whole, and changes made by some managers to tighten the unit redemption process may be more about structure, according to the head of Australian Unity Investments (AUI) David Bryant.
The management of liquidity levels stems from the make up of the fund's investor base and the underlying assets, he said.
"You need to have built up your investor base in the right way for liquidity not to be a problem. It is not really sensible to have two or three institutions owning half of your units in the fund because the decision of a single investor to exit causes a problem for everybody else," Bryant said.
AUI tends to put together their property portfolios with a series of smaller assets, emphasising income rather than capital growth, Bryant said.
"Same as you can skew your investor balance with two or three large investors, you can also muck up your asset balance with two or three large properties," he said.
Bryant said it was important for investors to assess the situation on a fund by fund basis, and not assume the whole sector is faced with a liquidity crisis.
Bryant was responding to the move by BlackRock to tighten the withdrawal process on three of its funds, and by the initiative from Axa to list its Wholesale Australian Property Fund on the Australian Securities Exchange to address their liquidity management.
In a further development in the sector, research house Adviser Edge has placed the whole Hybrid Property Sector on hold pending a full review.
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