AMP has announced a restructuring of the former Axa Wholesale Australian Property Fund, involving the sale of seven properties and a change of investment manager, following the opening of the fund to redemptions.

AMP will remove Dexus as the direct property manager on 31 May 2012 and replace it with AMP Capital.

It has also proposed to sell seven of the 17 assets in the fund to enable the withdrawal of funds by investors.

This measure, that will be communicated to clients on 17 February this year, would reduce the size of the fund from $647 million to $423 million in assets under management.

"We have identified various properties currently held in the portfolio to be sold as part of our property sales program, which will partly fund the expected initial withdrawal demand received during the transition period," AMP said in the fund's new product disclosure statement (PDS) published at the beginning of this month.

"We will seek to sell these properties at prices comparable to their most recent valuation," AMP said.

AMP has selected the seven assets according to strict criteria, including a refocus of the fund on Australian eastern seaboard properties, removing all New Zealand properties, removing any exposures to jointly owned properties and generating liquidity by selling only non-core properties.

The sale would lead to a slightly lower allocation to the office sector and an increased allocation to retail.

AMP also changed its investment ranges for the fund, with direct property moving from a minimum investment of 50 per cent to 25 per cent, while the maximum range remains 100 per cent.

In addition the cash holdings the fund is allowed to hold has been increased from 30 per cent to 50 per cent.

The allowed allocation to listed property remains at 50 per cent while there is no minimum allocation.

Currently, the fund has no listed property assets, but AMP Capital Brookfield will be appointed to manage any listed securities that might be purchased in the future.

The fund will go into a transition period during which the sale of assets will be commenced.

"Our objective is for the transition period to end on or before 30 January 2013," AMP said.

"However, for various reasons and in certain circumstances, we may be required to extend the transition period up until 30 January 2014.

"It's important to note that at any stage during or post the transition period, the responsible entity reserves the right to wind up the fund and will do so if it considers it in the best interests of investors."

The Australian Property Fund closed to redemption request in 2008, at the height of the global financial crisis.

Since then the managers have given a number of limited withdrawal windows.

The announced measures affect both the retail and wholesale version of the fund.