What lies ahead for unlisted property funds?

This article by Robert Harley in the AFR is interesting, perhaps prescient.  He writes that liquidity - a constant issue for property fund investors and managers - is becoming front and centre with the sector under pressure from falling values, and that this pressure can spread from the unlisted to the listed with unlisted exposure. He expects the biggest issues to arise from single office building syndicates.  Some funds are reported to be close to freezing redemptions.

I was front and centre in the post GFC carnage in the unlisted fund sector, and importantly Harley notes pundits don't expect similar carnage here, or anything like the collapse of the early 1990s, with the growth of sophisticated redemption mechanisms. 

But investors will have to wait to get their money. Some investors will get impatient, placing fund managers and their performance and strategy under pressure. Investors have limited ability to influence these investments, but what measures they have focus almost solely on the manager. Post GFC I acted for many investors targeting the manager or seeking their removal. 

Rob Harley also notes that difficulties in the recapitalisation of struggling funds will provide opportunities to those with capital. 

I witnessed this post GFC, and it can provide similar opportunities for investors who can align with the holders of that capital.

It is a sector to be watchful of as the effects of the economic pressures that have been building over recent months come through.