AMP Capital New Zealand is to suspend redemptions and accept no new applications into one of its New Zealand unlisted property funds, the AMP Capital NZ Property Fund.
The move was in the best long-term interests of investors, the company said today.
"We've taken this action as a prudent response to the current extraordinary market conditions that have resulted in higher than usual redemptions in the fund, not matched by fresh investment," AMP Capital New Zealand managing director Murray Gribben said.
The AMP Capital NZ Property Fund had investments in the AMP Capital Property Portfolio (APP) and some listed property trusts.
The underlying property assets held in APP continued to comprise ahigh quality, nationwide portfolio of assets strongly diversified by location and property type, AMP Capital said.
The portfolio had 96 percent occupancy and included the government sector as the single largest tenant on long-term leases.
The fund was permitted to suspend redemptions for up to one year, though AMP Capital would lift suspensions as soon as market conditions improved sufficiently.
After suspension was lifted the usual redemption provisions, which provided for a period of up to two years, applied.
"Because property is a long-term investment and the assets are not immediately realisable, these types of provisions are common to these types of funds to ensure that the interests of investors are protected during periods of market volatility," Mr Gribben said.
"In the current market, where investors are looking to reduce their exposure to property investments, we believe we are acting in the best interests of investors by temporarily suspending activity to preserve the quality of the fund."
AMP Capital said the issue was specific to the AMP Capital NZ Property Fund and the satellite retail funds invested in it. No other AMP investment vehicles were affected.
