London's iconic Tower Bridge, Feb 26, 2015. [Photo/IC]

As many as seven property funds in the United Kingdom announced suspension of redemption as investors dump holdings in fear of property market slumps after Britain's vote to leave the European Union.

Analysts said that they were not surprised by panic selling and that the situation is likely to favor opportunistic buyers.

The property market in the UK, particularly office properties in London, may fall more than 20 percent, and investors may withdraw money from the market, the analysts said.

A research note from Savills World Research UK Offices said some risk-averse non-UK investors may come under pressure in their domestic markets to sell out of London. Retail funds, which account for less than 10 percent of the UK market, are already seeing a rise in redemptions, which will force some sales.

"Many of these funds have already increased liquidity levels over the past six months in anticipation of increased redemptions," the report said.

The UK has become one of the top five global real estate investment destinations for Asian investors in the past decade, and the Brexit results have affected share prices of companies, which have property developments in London, particularly those from China. Asian investors accounted for 12 percent of the 10.7 billion pounds ($13.89 billion) of direct real estate investment in the UK in the first quarter this year, based on JLL data

Devaluation of British pounds and declining asset prices would "undoubtedly be detrimental for existing Chinese investors" in the UK, according to Claire Hoey, managing director with Hong Kong-based investment bank Ion Pacific. For example, share prices of Dalian Wanda Commercial Properties Co Ltd, which is building residential properties in London's Nine Elms district, have fallen 6.4 percent in Hong Kong since June 23.

However, it is likely that the UK government will work quickly to establish incentives of some kind for foreign capital to remain invested or to attract further foreign capital, said Hoey.

For investors who have not already entered the UK market, the post-Brexit UK may attract opportunistic capital targeted at London from the United States, Middle East and Asia Pacific. For example, investment returns from London offices, given the reduced purchase prices, could be attractive.

For Chinese investors who are able to and willing to take a long-term approach, declining asset prices in UK could create real value investment opportunities, said Hoey.

According to Nigel Almond, head of Capital Markets Research with DTZ and Cushman & Wakefield, demand for properties in prestigious locations, such as the City of London, is still robust, and the depreciation of the pound may accelerate dollar-denominated capital flows into the market.

Li Wenfang in Guangzhou and Bloomberg contributed to this story.

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