Standard Life Investments UK suspended trading in its £2.9bn ($3.8bn) real estate fund on Monday (4 July) following a rise in withdrawal requests by investors, triggered by the country's decision to leave the European Union. The company said the suspension will continue until it is "practicable" to lift it.

The rush to withdraw investments in the real estate fund reportedly came after Standard Life Investments decided last week to write down the value of the fund by 5%, citing "negative impact" of the Brexit vote on the valuation of commercial properties in the UK. The fund mostly invests in shopping centres, warehouses and offices.

Laith Khalaf, senior analyst at Hargreaves Lansdown, told the Guardian that the Brexit vote put severe pressure on property funds and "we could now see a new wave of investors being unable to liquidate their property funds quickly, which we last witnessed during the financial crisis". He added that the suspension of the fund is the first such move since the 2008 financial crisis.

In a statement, the insurer confirmed that the suspension decision was taken following an increase in redemption requests after uncertainties in the UK commercial real estate market following the Brexit vote. The firm added that the decision was aimed at protecting the interests of all investors in the fund.

"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," the insurer further explained in the statement.

The Guardian cited data from the Investment Association that showed £360m was withdrawn from property funds in May ahead of the 23 June EU referendum, while equity funds witnessed £439m of outflows.

Khalaf expects other funds to follow suit as they too would feel the pressure of increasing outflows. "If Standard Life is experiencing outflows it would appear likely that the others are too and they may need to deal with that. We may be seeing more activity like this," he said, the Guardian reported.

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Standard Life suspended trading in its £2.9bn UK property fund after rise in outflowsGetty Images