Canada Life, Savills fire up frozen UK property funds

LONDON (Reuters) - Canada Life reopened its suspended 341 million pound UK property fund on Thursday and Savills Investment Management said it had partly reopened two funds, as the sector shows further signs of life after a six-month freeze.

Much of Britain's 70 billion pound property fund market was suspended in March on uncertainty about valuations as a result of the COVID-19 pandemic.

Surveyors lifted that uncertainty warning last month and funds such as those managed by BlackRock <BLK.N> and Legal and General <LGEN.L> have started to reopen.

Others have been more cautious, amid concern over the possibility of large investor withdrawals, particularly for funds which allow investors to take their money out daily.

Canada Life's LF CanLife UK Property ACS, which usually offers daily redemptions, started trading again on Thursday, the firm said in an emailed statement.

Harry de Ferry Foster, co-head of UK at Savills Investment Management, said the firm recently completed outstanding redemption requests from March for two funds with quarterly redemption periods - the UK Income and Growth Fund and the Charities Property Fund.

June and September redemption requests would be completed in December, he said.

The funds "chose to open cautiously", de Ferry Foster said, to avoid the risk of hefty redemption requests and maintain strong cash levels for further capital investment.

Britain's Financial Conduct Authority (FCA) has proposed that a wait of up to six months for redemptions could avoid a stampede by investors and widespread fund suspensions in future.

The Bank of England on Thursday backed the FCA's plans, saying there could be benefits from an even longer delay.

(Reporting by Carolyn Cohn, Editing by Lawrence White and Susan Fenton)