Getting out: hold periods, exits, and what a secondary market really does

Entry gets all the attention and exit decides the outcome. A return is only realised when a position is converted back into money, and property is unusually bad at that conversion. Understanding why is more useful than any assurance about it.

Why property is slow to sell

A share in a listed company is fungible: one is identical to another, thousands of buyers are looking at the same screen, and the transaction completes in moments. A building is the opposite. It is unique, so a buyer has to be found who wants that specific asset. That buyer usually needs finance, which takes weeks and can fail. They will want to inspect and to run legal checks. Then the transfer itself involves contracts, taxes and registration. Every one of those steps is measured in weeks or months, and none can be skipped.

Markets seize before they fall

When conditions turn, the first thing that happens is not a price drop — it is that transactions stop. Sellers who do not have to sell withdraw rather than accept less, buyers wait for clarity, and volumes collapse while headline prices barely move. The practical consequence is uncomfortable: the moment you are most likely to want out is the moment the fewest people are buying. Liquidity is at its worst exactly when it is most wanted, and this is a property of the asset class rather than of any particular platform.

What a hold period is

A stated hold period is the plan for how long capital is expected to be committed before the asset is sold or refinanced. It is an intention supported by a strategy, not a maturity date on a deposit. Most structures allow it to be extended, and the circumstances that trigger an extension are usually the ones that made selling unattractive in the first place. Read the extension provision specifically: who decides, on what grounds, for how long, and whether holders are consulted or merely informed. Then plan on the basis that money committed for a stated period may be committed for longer, and never commit money you expect to need within it.

The exits that actually exist

There are only a few. The asset is sold and proceeds are distributed — the normal route. It is refinanced, returning some capital while the position continues. The whole vehicle is sold to another owner. Or your individual holding is transferred to someone else. Only the last of those is available to you alone; the rest depend on a decision taken for everyone.

What a secondary mechanism can do

Where regulation permits one, a secondary mechanism matches a holder who wants out with someone willing to take the position. That is genuinely valuable. It can shorten the wait, it removes the all-or-nothing quality of being locked in until the asset itself is sold, it creates an observable reference price between valuations, and it handles the administration of a transfer that would otherwise be slow and manual.

What it cannot do

It cannot conjure a buyer. If nobody wants the position, a matching mechanism has nothing to match, and this is most likely precisely when you want to leave. It cannot promise a price: a transfer clears where a buyer and a seller agree, and in a thin market that gap can be wide and the clearing price can sit below the stated value of the underlying asset. It cannot promise timing. It cannot suspend transfer restrictions written into the documents or holding periods imposed by regulation. And it does not convert a private holding into a listed security — the two are different things with different rules, different disclosure and different depth of demand.

Discounts are normal, not a malfunction

Positions in illiquid vehicles commonly change hands below the value attributed to the underlying asset. The buyer is taking on the same illiquidity you are trying to escape and is compensated for it. Expecting to exit early at full attributed value is the single most common unrealistic assumption people bring to this asset class.

The honest framing

Treat any early exit as a possibility rather than a plan. The sound approach is to commit only capital you can leave committed for the full period and then some, to read the transfer and extension clauses before subscribing rather than when you need them, and to regard a secondary mechanism as something that may improve your odds rather than something that removes the constraint. Property is a slow asset. Everything honest about liquidity in this market starts from accepting that.