Norway’s sovereign wealth fund has written down the value of its UK property holdings by 5% following Britain’s vote to leave the European Union, citing market uncertainty.

The Government Pension Fund Global has significant exposure to UK property, with 16% of its NOK221bn (€23.6bn) real estate portfolio in London and 23% in the UK – over twice its exposure to French property.

Norges Bank Investment Management (NBIM) said in its second-quarter report that the fund’s external valuers decided against any changes to the UK portfolio’s value, as there was a shortage of data on the impact of Brexit.

But NBIM decided to writedown the values of its UK property assets by 5%.

“The increased volatility and uncertainty in the market are assumed to have a negative effect on property values,” NBIM said.

“The fund has therefore decided to adjust down the estimated value of the property investments in the UK from external valuers by 5% as at 30 June.”

The writedown resulted in its unlisted real estate holdings posting a negative return (-1.6%) during the second quarter, while listed holdings fell by 0.9% over the same period.

Although rental income returned 0.9%, the writedown’s overall impact saw real estate produce a -1.4% return, below both the sovereign fund’s equity holdings (0.7%) and its fixed income holdings (2.5%).

Trond Grande, NBIM’s deputy chief executive, said the three months to June only saw the strong fixed income returns due to rate cuts across the globe.

“After a period of relatively stable markets at the beginning of the quarter,” Grande continued, “the British decision to leave the EU sparked a sharp decline in Europe.

“Markets recovered relatively quickly, but with major variations between sectors,” he added.

Despite writing down the value of its UK portfolio, NBIM remains interested in the market, and acquired a central London property in the weeks after the Brexit vote.

The sovereign fund bought a combined retail and office asset from Aberdeen Asset Management for £124m (€149m) as the UK manager was struggling with the liquidity of its flagship open-ended property fund.

Nearly half of the NOK7.2trn sovereign fund’s UK property was office space at the end of June, with 38.4% in retail, 14.2% in logistics and 1.6% in unspecified other sectors.