Greenman Open, a €1.26 billion German supermarket property fund, has temporarily blocked its mainly Irish investors from withdrawing their investments amid an ongoing wave of redemption requests.
The fund, which is backed by about 8,000 Irish investors, saw a spike in redemption requests in the third quarter of the year. Now, it has activated a “redemption gate” clause set out in the prospectus, which chief executive Johnnie Wilkinson said will afford time to “replenish” the liquidity reserve.
Ordinarily, the fund – which is invested in 85 retail properties in Germany, leased to supermarket chains such as Aldi, Lidl, Edeka and Rewe – would have to honour an investor redemption request within six months of its receipt. Mr Wilkinson told The Irish Times that the gating mechanism suspends this obligation, “and gives us a chance to breathe”.
“Ultimately, it’s a delay as opposed to anything else,” he said.
The chief executive said the fund had received redemption requests with a total value of between €30 million and €32 million since the beginning of October. “That [left us] in a position where we just felt it would be prudent to take that step [of gating the fund],” he said.
Asked how long he expects it to be gated, Mr Wilkinson replied: “I think the best case will be 12 months. The more realistic case will be 18 months.”
New redemption requests can be submitted during the suspension period, but will not be processed until the conditions for their conclusion are met, Greenman said in a statement. The new requests will then be processed in chronological order “once sufficient liquidity has been generated”.
Greenman said it had notified the Central Bank of Ireland, which regulates the firm’s management company, of the decision. The fund is regulated in Luxembourg, where authorities have also been notified.
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The Irish Times reported in October that the uptick in requests followed a delay in repayments in July as the fund sought to preserve cash as it moved to a new system for investors to buy and sell units of the fund.
Aviva also removed the fund from an investment platform earlier this year.
Greenman said at the time that investors putting in “knee-jerk” redemption requests may not recover the prevailing net asset value of their investment if the fund makes a loss selling underlying properties to meet demands while upholding its regulatory requirement to hold at least 10 per cent of assets in cash.
This week, Mr Wilkinson said the Greenman is now “quite deep” into a disposal programme and has “offered a portfolio of 14 properties to the market” in Germany through agent JLL.
[ Dublin property firm spends €100m on German supermarketsOpens in new window ]
“They have a total value of plus or minus €220 million and we’re in the process now of receiving the offers on those properties,” he said. “That’s also a helpful thing with the gating, because it means that we don’t have to rush and also that the prospective buyers know we’re not in a fire-sale situation.”
He said he expects those properties to be sold “maybe in one go, but more likely on a staggered basis” with the contracts agreed in early 2026.
Mr Wilkinson, who cofounded the firm in 2005 with fellow financial adviser Peter O’Reilly, also said Greenman Open’s underlying property portfolio is “performing very, very well” with all of its tenants meeting their rental obligations.