Savills has dropped plans to launch the UK’s first Housing Investment Trust (HIT), a quoted vehicle specialising in residential property, after two key investors pulled out at the last moment.
Savills Residential Property Trust (SRPT), sponsored by Dresdner Kleinwort Benson, had hoped to raise about £80m from institutions to invest in rented homes.
But two insurance companies which indicated they were willing to invest £10m-£15m each in the vehicle changed their minds. They were concerned that the HIT would trade like an investment trust at a discount to net asset value when it was launched on the stock market. Investment trusts are trading at discounts of around 15%-20%.
In a statement today Savills said:”SRPT has been postponed following requests from a number of leading institutions concerned at uncertainties in the market.” The company said its proposed HIT “attracted solid support from a wide range of institutions.” But market sources say that although many funds looked at the HIT few were convinced it would work.
EGi News 22/01/98
