THE world's biggest sovereign wealth fund has added to fears over Britain's property market as it slashed the value of its UK portfolio after the Brexit vote.
Norway's 7.18 trillion kroner (£669 billion) Global Government Pension Fund said it had cut the value of its UK property portfolio by five per cent due to "increased volatility and uncertainty" in the sector.
Almost a quarter of its 221bn Norwegian kroner (£21bn) property portfolio is invested in the UK.
The fund said its external valuers could not update property valuations to take account of the Brexit vote impact due to a shortage of data.
It decided to adjust the valuation itself, but warned it was subject to "greater uncertainty than usual".
Seven property investment funds worth around £18bn suspended trading in the wake of the EU referendum as investors headed for the exit amid concerns of a price crash in the sector.
Figures from the Investment Association earlier this month showed retail investors pulled £3.5bn from UK managed investment funds in June.
Property funds took the brunt of the withdrawals, with £1.4bn pulled out by worried investors.
Norway's fund, which holds the surplus wealth produced by Norwegian oil and gas income, said it returned 1.3 per cent or 94bn kroner (£8.8bn) in the second quarter of 2016.
Fixed-income investments, such as bonds, performed the best, with 2.5 per cent returns, while equity returned 0.7 per cent and real estate returns fell 1.4 per cent.
Trond Grande, chief executive of Norges Bank Investment Management, said: "After a period of relatively stable markets at the beginning of the quarter, the British decision to leave the EU sparked a sharp decline in Europe.
"Markets recovered relatively quickly, but with major variations between sectors."
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