Swiss Life Suspends Unit Redemptions and Issuance
Swiss Life Kapitalverwaltungsgesellschaft mbH suspended the redemption of units in the open-ended real estate fund Swiss Life REF (DE) European Real Estate Living and Working (ISIN DE000A2ATC31) at 12:00 noon on 20 October 2026. No new units have been issued since that time either, for the time being.
The fund management company cites insufficient liquidity as the reason. According to the company, the available funds were not sufficient to meet redemption requests as they fell due while also ensuring the proper management of the real estate portfolio. According to the official investor notice, the decision was preceded by a balancing of interests that took account of both the interests of the remaining investors and those wishing to redeem their units.
Suspension May Last up to 36 Months
The fund may remain closed for up to 36 months. It is currently unclear when redemptions can actually resume.
The rules governing ordinary redemptions provide for a minimum holding period of 24 months and a 12-month notice period for redemption. According to the fund management company, redemptions that had already fallen due by 20 October 2026 were still processed.
Impact on Existing Redemption Requests
Investors who have already given notice to redeem their units but whose 12-month notice period is still running will not receive payment during the suspension. Redemption can take place only once the fund resumes redemptions. The applicable redemption price will then be the price in effect at that time.
Units for which notice of redemption has been given may not be sold on a stock exchange until the notice period expires. A redemption request may be withdrawn under certain conditions. Whether this is possible in an individual case depends on the applicable contractual terms and fund rules.
Statutory Phased Plan
The following staggered requirements apply as the situation progresses:
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If liquidity remains insufficient after 12 months, properties may be sold at prices up to 10 percent below their appraised market value.
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After 24 months, the permissible discount increases to up to 20 percent.
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If unit redemptions still cannot resume after 36 months, the fund must be wound up.
During the suspension, half of the ordinary income is still intended to be distributed. According to Swiss Life, several properties have already been selected for sale.
Property Sales Intended to Generate Liquidity
Swiss Life attributes the pressures, among other things, to the reversal in interest rate policy in 2022. The situation in the interest rate and real estate markets reportedly deteriorated further in 2026 following the escalation of the conflict in the Middle East. A large number of owners willing to sell are facing a smaller number of potential buyers. As a result, sales processes are taking longer, while substantial price discounts may also be necessary.
According to the provider, the fund has seen increasing redemption requests since autumn 2025. Without sufficient inflows of funds, additional liquidity can essentially be generated only through the sale of properties.
Since 2024, the company has sold six retail, commercial and residential properties for a total of approximately EUR 220 million. Most of these were local retail centres. By the time redemptions were suspended, approximately EUR 300 million had been paid out to investors.
Fund Structure and Key Figures
The fund was launched on 22 December 2016. At the end of September 2026, the portfolio comprised 37 properties in Europe. These were divided approximately equally between the “Living” segment, comprising healthcare and residential properties, and the “Working” segment, comprising commercial and local retail properties.
According to the fund management company, the fund’s net asset value amounted to approximately EUR 762 million at that time. The occupancy rate was 92.7 percent. The annual report lists 37 properties in six countries.
According to the factsheet dated 30 September 2026, the issue price was EUR 10.68 and the redemption price was EUR 10.17 per unit. The debt ratio was 22.7 percent. According to Swiss Life, the suspension does not affect the company’s other funds.
Open-Ended Real Estate Funds Under Market Pressure
The developments affecting Living and Working are part of broader pressures on open-ended real estate funds. In 2026, several funds suspended unit redemptions or announced that they would be wound up. UBS (D) Euroinvest Immobilien, Kanam Leading Cities Invest and Catella Max are already in liquidation.
The Bundesbank puts net outflows from open-ended real estate funds in 2025 at EUR 7.6 billion. In the previous year, they had amounted to EUR 5.9 billion. These figures illustrate the continuing liquidity pressure in this market segment.
Open-ended real estate funds face difficulties in particular when numerous investors wish to redeem their units within a limited period. Properties generally cannot be sold at short notice without the possibility of discounts in value. This can therefore create considerable tension between the liquidity of fund units and the long-term commitment of the fund’s real estate assets.
Legal Options for Affected Investors
The suspension of unit redemptions does not automatically give rise to a claim for damages. Whether investors can take legal action against the advising bank, the investment intermediary or, where applicable, other responsible parties depends in particular on the circumstances surrounding the acquisition of the units, the information provided and any potential breaches of duty.
An individual legal assessment may be worthwhile in the following areas in particular.
Damages for Defective Investment Advice
If the fund units were acquired following investment advice, a claim for damages against the advising bank or investment adviser may be considered if the advice was defective.
A key issue is the disclosure of liquidity risk. In judgments dated 29 April 2014, the Bundesgerichtshof (BGH, Federal Court of Justice) clarified that, when recommending open-ended real estate funds, banks must inform investors of the possibility that unit redemptions may be suspended (BGH, judgments of 29 April 2014, case nos. XI ZR 477/12 and XI ZR 130/13).
Investors can therefore have it assessed whether, before acquiring the units, they were informed clearly and accurately that, if redemptions were suspended, they might be unable to access their invested capital for an extended period.
Other advisory errors may also be relevant, including:
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an inaccurate representation that the invested capital would be available at any time;
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downplaying the risks of open-ended real estate funds;
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failure to give adequate consideration to the investor’s investment objectives, investment horizon and risk tolerance;
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an inaccurate or incomplete presentation of material costs and risks;
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a recommendation that was unsuitable for the individual investor’s profile.
Whether a breach of duty occurred must be assessed on the basis of the specific advisory meeting and the available documents.
Claims Based on Inaccurate or Incomplete Sales Documents
It can also be assessed whether the sales documents, key investor information or other product information used before the acquisition were inaccurate or incomplete.
This may be relevant in particular if material risks associated with the investment were not accurately presented or if the information as a whole created a misleading impression regarding the availability of the invested capital.
Whether this gives rise to claims depends on the specific documents, the date of acquisition and the applicable statutory provisions.
Assessment of Potential Claims
The suspension of unit redemptions in Swiss Life REF (DE) European Real Estate Living and Working as of 20 October 2026 presents investors with significant challenges. For the time being, the invested capital cannot readily be accessed by redeeming the units through the fund management company. It is currently impossible to predict reliably how long the suspension will last or what economic value the fund units will have in the future.
However, the suspension alone does not yet give rise to a claim for damages. Instead, investors should have it assessed whether, when acquiring the fund units, they were properly informed of the risks, particularly the possibility of a suspension of redemptions and the associated liquidity risks.
Disclosure of Liquidity Risk
Particularly where an investment was recommended by a bank or investment adviser, the case law of the Bundesgerichtshof on the disclosure of liquidity risks associated with open-ended real estate funds may be relevant. If the assessment shows that advisory or disclosure obligations were breached, claims for damages and, where applicable, the unwinding of the investment transaction may be considered.
Affected investors are therefore advised to have their acquisition and advisory documents reviewed promptly and to obtain an individual assessment of potential claims and the applicable limitation periods.
Capital Markets Law Considerations for Investors
The suspension of redemptions raises issues including redemption requests, time limits, unit prices, fund rules and further developments during the suspension period. The resulting legal consequences must be assessed on the basis of the respective investment and the underlying documents. MTR Legal Rechtsanwälte advises companies, investors and high-net-worth individuals on the relevant issues; further information is available under legal advice on capital markets law.
