Morgan Stanley German Property Fund Halts Redemptions

Stephen Harris

31 October 2008

Morgan Stanley Real Estate Investment GmbH is the latest German open-ended property fund to suspend redemptions after a steep drop in investor sentiment.

The Frankfurt-based branch of Morgan Stanley's $96.3 billion global real estate management business said it had temporarily called a halt to investors' quitting its P2 Value fund after a rush of "major, unanticipated withdrawals."

"The fund has recently experienced significant redemptions, particularly in the past two days, due to the extraordinary market environment and the recent suspension of redemptions by other open-ended property funds," the firm said in a statement.

The P2 Value Fund has diversified investments in commercial and residential real estate in Asia, the US and Europe excluding the UK. Its property portfolio is around 95 per cent let and has generated a 5 per cent yield in the past 12 months.