Legal & General has bumped up the price of its property fund

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Legal & General has increased the price of its property fund, saying conditions have stabilised since the week in which several similar funds suspended trading.

The firm has reduced the fair value adjustment on its property fund from minus 15 per cent to minus 10 per cent, which led to the fund price going up by 4.3 per cent on Friday.

Read more: Property funds forced to close the gate on £15-20bn worth of funds

Asset managers closed £15-20bn worth of funds earlier this month as investors withdrew cash due to uncertainty after the result of the EU referendum; funds were unable to guarantee they would be able to meet further redemption requests, and closed their doors.

The announcement from Legal & General comes as British Land said today that had successfully disposed of Debenhams' store on Oxford street for £400m.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Property funds are likely to exhibit extreme volatility in the current environment as valuers seek to get a handle on what the referendum results has actually done to the UK commercial property market.

Read more: British Land says investors will be cautious after the Brexit vote

"The reduction in the fair value adjustment isn't an indication of a reversal of flows into the property fund sector, rather it's a moderation of the mark-down made to the underlying property portfolio in the aftermarh of the Brexit vote.

"It's a risky business buying or selling property funds at the moment while prices are bouncing around so much without any warning, and may turn out not to be truly reflective of the underlying market."

Full story: Legal & General has bumped up the price of its property fund: City A.M.

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