Eduardo Gorab, property economist at Capital Economics, says that despite some reports of open-ended property funds increasing their cash reserves, the data for net flows into such funds offer little support for the idea that investor sentiment towards commercial property has turned.

Gorab said: “More than a year on from their post-referendum wobble, open-ended property funds still appear to be dealing with pressure to sell off assets. Indeed, last week, a fund managed by Aviva sold a supermarket asset to Legal & General for £52m in response to some investors choosing to reduce their exposure to direct real estate. Some commentators have suggested that this is a worrying sign for the market.

“Admittedly, open-ended funds increasing their cash reserves does seem like a bearish signal. Funds tend to increase their cash reserves to be better placed to deal with a surge in redemption requests, like the one seen last summer.

“However, such an interpretation may be too gloomy. Indeed, according to the latest RICS survey, investor demand is still rising. Overseas investors are, on average, making net purchases of around £1bn of UK property assets per month.”