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Post-Brexit uncertainty has led to investors trying to flee property funds.Reuters

M&G Investments became the third investment management firm to suspend trading in Britain's biggest commercial property fund following the UK's vote in favour of leaving the European Union.

The firm, which is part of British insurance giant Prudential, suspended trading in its £4.4bn (€5.1bn, $5.7bn) fund after it registered a "marked increase" in customers trying to pull out of the fund following the Brexit vote.

The decision came only a day after Standard Life and Aviva had stopped trading on similar schemes, prompting analysts to paint a gloomy picture for the UK property market. The former had last halted trading in its real estate fund during the 2008 financial crash, while the latter had never taken a similar decision before.

"The dominoes are starting to fall in the UK commercial property market, as yet another fund locks its doors on the back of outflows precipitated by the Brexit vote," said Laith Kalaf, analyst at Hargreaves Lansdown.

"It's probably only a matter of time before we see other funds follow suit."

The Financial Conduct Authority (FCA) has put commercial property funds under review after the pro-Brexit vote sparked fears commercial properties might be a risk to the economy.

"I think it does point to issues that we need to look at in the design of these things because it comes back to my fundamental point about holding illiquid assets in open end funds that revalue and are required to be revalued," said FCA chief executive Andrew Bailey.

Naomi Heaton, chief executive of residential funds and asset management London Central Portfolio warned investors should beware the "empty promises" and liquidity trap of open-ended vehicles and learn the harsh lessons of the financial crisis.

"Whilst open-ended funds, such as Aviva, purport to offer liquidity, in a falling market these funds suspend redemptions when investors rush to withdraw money, with disastrous consequences," she said. "Closed-end funds do not have this problem as investors come in with a medium term horizon and do not bank on a speedy exit."