Standard Life Investments has suspended trading in its £2.91bn (€3.47bn) SLI UK Real Estate Fund.

The freeze on the property authorised investment trust (PAIF), which is open to institutional and retail investors, will evoke memories of the liquidity crisis that hit UK property unit trusts in 2008.

A spokesperson said: “The decision was taken following an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the EU referendum result.”

The fund, launched in 2004 and managed by George Shaw, owns 124 properties spread geographically and sectorally with an average value of £19.9m.

It is thought to be the first such vehicle to halt redemptions since the financial crisis of 2008, and follows moves last week by Standard Life and several other rival managers to cut the price funds for retail investors.

In 2008, several property funds in the UK had to halt redemptions, primarily because of retail investors rushing to pull money out of the market. While the phenomenon did not cause the crash in the UK commercial property market – where values dropped 44% from peak to trough – it did precede it.

There has been a slowdown in activity in the UK real estate market in recent months, exacerbated by uncertainty before and after the UK’s referendum of its EU membership last month.

A number of UK fund managers have downplayed the likelihood of another market crash.

Standard Life said: “The suspension will end as soon as practicable, and will be formally reviewed at least every 28 days.” 

The fund “invests in diverse mix of prime commercial real estate assets” and “its lower risk positioning should be beneficial for performance in times of market stress and uncertainty”, the spokesperson said.

“However, unlike investing in equities, the selling process for real estate can be lengthy as the fund manager needs to offer assets for sale, find prospective buyers, secure the best price and complete the legal transaction.

“Unless this selling process is controlled, there is a risk that the fund manager will not achieve the best deal for investors in the fund, including those who intend to remain invested over the medium-to-long term.”