Top asset managers, including M&G, Columbia Threadneedle, Schroders and CBRE Investment Management, have imposed restrictions on property fund redemptions since September, after money market turmoil and interest rate rises forced investors to pare exposure to the asset class.

BlackRock's UK property fund will defer withdrawals that were originally due to be paid at the end of December, a person familiar with the situation said, asking not to be named.

It had previously also deferred second-quarter redemptions, which were due to be paid out at the end of September. The fund had 3.5 billion pounds in assets under management as of October.

Open-ended real estate funds across Britain have been battling to meet a surge in demand for investor exits, against a backdrop of stubbornly high inflation and economic uncertainty.

Many British pension schemes cut their exposure to property to rebalance their portfolios after selling large volumes of more liquid assets in late September, when a package of unfunded tax cuts proposed by former Prime Minister Liz Truss sent UK government bonds into freefall.

As of November, funds overseeing around 17 billion pounds in UK real estate assets were restricting redemptions to prevent firesales.

A spokesperson for Legal & General Investment Management said on Wednesday that its Managed Property Fund was no longer deferring redemptions.

"However, it remains a liquidity tool that may be utilised for future redemption requests where market conditions or other external factors require," the spokesperson said.

M&G, Columbia Threadneedle, Schroders and CBRE did not immediately confirm to Reuters whether redemption deferrals were still in place for their UK property funds.

($1 = 0.8277 pounds)

(Additional reporting by Kirstin Ridley, editing by Sinead Cruise and Barbara Lewis)

By Elizabeth Howcroft and Carolyn Cohn