Swiss bank UBS said on Monday that it is halting redemptions from its UBS (D) 3 Sector Real Estate Europe property fund on the back of growing redemption demands from its investors. The vehicle, which had re-opened in October 2009 after over a one-year redemption freeze, will be suspended for a period of 12 months, UBS said.

Swiss bank UBS said on Monday that it is halting redemptions from its UBS (D) 3 Sector Real Estate Europe property fund on the back of growing redemption demands from its investors. The vehicle, which had re-opened in October 2009 after over a one-year redemption freeze, will be suspended for a period of 12 months, UBS said.

The fund is managed by UBS' Munich-based KAG fund management unit. According to UBS, the large outflows in the fund were mostly a result of the proposed changes in legislation for German open-ended real estate funds as well as recent developments in the German investment market, such as the dissolution of KanAm US-grundinvest fund.

UBS said that the closure of the fund is not related to the fundamentals of the vehicle, which has shown a net return of 4.8% in the past financial year.

In October last year, UBS lifted the year-long freeze on redemptions from the fund after raising its liquidity position to 22%, or EUR 103 mln, of which around EUR 80 mln was made available for servicing redemptions. The fund first closed in August 2008.