Core open-ended US real estate funds managed by Heitman and ASB Real Estate Investments have been ‘gated’ and more vehicles in the $264bn (€238bn) NCREIF ODCE index are expected to follow suit, according to investors.

The Ohio Bureau of Workers Compensation told IPE Real Assets that it was aware that the Heitman America Real Estate Trust ”will not be paying out any redemption requests for the eligible quarter”.

Anthony Breault, a senior real estate investment officer for the Oregon State Treasury, also said the ASB Allegiance Fund had “halted dividend distributions in order to manage cash flows and redemptions during this time of illiquidity”.

Heitman declined a request for comment, and ASB did not respond to a request for comment.

The gating of ODCE funds is expected to be more widspread. Paul Chapman, director of real estate and real return strategies for the New Mexico State Investment Council (New Mexico SIC), said: “In our portfolio, most open-ended core funds have gated redemptions.”

New Mexico SIC is invested in PRISA, UBS Trumbull Property Fund, Heitman America Real Estate Trust, Jamestown Premier Property Fund and Lion Industrial Trust.

Chapman told IPE Real Assets that the “exception seems to be industrial-focused funds where values are holding up well to the extent that the redemptions and contributions are small in relation to the fund size”.

Breault told IPE Real Assets that: “We have been anticipating most, if not all, of the open-end funds, will enact gating measures for redemptions and dividends in order to best protect net asset value for investors and ensure adequate cash-flow coverage for debt servicing.”

A survey published by the Pension Real Estate Association (PREA) on Monday revealed that 67% of US investors expect current appraisal valuations of real estate assets to “contain material uncertainties”, and a further 23.9% anticipate they will be “less accurate estimate of true value currently than under normal circumstances”.

Only 5.5% thought appraisals would be, on average, as accurate as under normal circumstances, and 3.7% had no opinion.

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