LONDON • Property funds in Britain with about £18 billion (S$31 billion) of assets froze withdrawals as investors sought to dump real estate holdings in the aftermath of the country's vote to leave the European Union.

"It's reminiscent of Bear Stearns' sub-prime funds before the Lehman debacle," Janus Capital Group fund manager Bill Gross said on Bloomberg TV.

"If these property funds are just one indication, perhaps there will be others to follow. I think it's something to worry about."

Henderson Global Investors, Columbia Threadneedle Investments and Canada Life suspended trading in at least £5.7 billion of funds on Wednesday. Aberdeen Fund Managers cut the value of a property fund by 17 per cent and suspended redemptions so that investors who asked for their money back have time to reconsider.

Investors are pulling money from British property funds as analysts warn that London office values could fall by as much as 20 per cent within three years of the country leaving the EU. During the financial crisis of 2007 and 2008, real estate funds were similarly hit by redemptions and forced to halt withdrawals, contributing to a slump in property prices of more than 40 per cent from their peak in Britain.

Wednesday's moves bring the number of British firms curbing redemptions to seven since the June 23 vote.

"The problem with open- ended funds is that you do start to have panic selling, so you really have no choice but to suspend the fund," said Tilney Bestinvest managing director Jason Hollands. "There's an inevitability to this now."

With the real estate tremors echoing the last financial crisis, the growing fear is that failure to control aftershocks from the Brexit vote will propel the economy into recession.

The pound sank to a fresh 31-year low as the fallout continued to reverberate through financial markets. "We can't ignore what's happening from a redemption-request perspective or the closing perspective," said Mr Wayne Bowers, chief executive of Northern Trust's international asset management arm.

"You can't brush that under the carpet. Then you're looking at other assets that are under, or are potentially under, similar pressure."

Occupancy of offices could also suffer should Britain fall into recession, as many experts have warned, or if banks and other businesses look to move staff abroad.

Singapore's United Overseas Bank last week said it would halt lending on property purchases in London because of uncertainty caused by the vote outcome.

BLOOMBERG, AGENCE FRANCE-PRESSE