Aviva to reopen UK property fund shut by Brexit turmoil

* Aviva Investors to reopen fund on Dec. 15

* Decision comes earlier than expected

* Comes ahead of FCA discussion on wave of suspensions (Recasts, adds detail from statement, background)

By Simon Jessop and Carolyn Cohn

LONDON, Nov 23 (Reuters) - Aviva Investors, the fund arm of insurer Aviva (Other OTC: AIVAF - news) , plans to reopen the UK property fund it was forced to suspend during the market turmoil which followed Britain's vote to leave the European Union in June.

British funds worth around 18 billion pounds ($22 billion) in total suspended activities in early July, after they ran out of ready cash to pay retail investors who demanded their money because of fears property prices would collapse.

The decision to reopen the Aviva fund on Dec. 15, ahead of schedule, means all seven of the funds that suspended trading will be open ahead of the initial stage of a regulatory review into the market.

Aviva Investors said on Wednesday it had sold 11 properties for 212 million pounds ($262.6 million) to rebuild liquidity in its Aviva Investors Property Trust, after initially suspending dealing on July 5, days after the referendum.

In a letter to investors it said that it had not been forced into a fire sale of assets, with valuations achieved broadly in line with market valuation changes since the vote.

"We have undertaken an orderly sales programme to rebuild liquidity. This has enabled us to obtain the best value for the asset sales while continuing to actively manage the remaining properties in the Trust," Ed Casal, chief executive of Aviva (Amsterdam: AW8.AS - news) Investors Real Estate, said in an emailed statement.

UK commercial property values have not fallen as far as expected in the wake of the June 23 Brexit vote, dropping around 3.5 percent between July and September and steadying in October, according to the MSCI IPD real estate index. ($1 = 0.8074 pounds)

(Editing by Lawrence White and Alexander Smith)