Centro will wind up its Direct Property Fund (DPF) in light of having 93 per cent of its unit holders redeem their money since December 2011.

The fund had been closed to redemption requests since December 2007, due to liquidity constraints, but was re-opened in December last year after a company restructure.

The $1.3 billion fund has since experienced a huge number of redemptions, which has seen its assets under management drop to just $71.3 million as at 4 May this year.

The significant volume of redemptions was partly the result of a change in the investment exposure.

"The actions taken to achieve the liquidity required to lift that suspension meant that DPF's investment mix changed from a diversified exposure to a range of Centro managed unlisted direct property funds to the current position where most of DPF property exposure is now through one listed stapled group, Centro Retail Australia," the group said in a letter to unitholders.

"This letter now notifies all DPF unitholders that based on the current position of the DPF, we intend to wind up the fund, as we consider that the objectives of the DPF, whilst having previously been met, can no longer be accomplished given the restructure of the original Centro group and the reduction in size of DPF."

Centro intends to start the wind-up procedure on 6 June 2012.

Units in the fund have now been suspended to allow an orderly wind-up.

A final distribution to unit holders is expected to take place around 26 June this year.