The unit to be held by investors and traded in the new market will be known as a Property Income Certificate (PINC). This is a new form of tradeable security with two inseparable elements:
(1) An Income Certificate — a right to receive a share of the property’s rental income flow. This is a right under contract and hence the income received is a contractual payment rather than a rent derived from an interest in land.
(2) An Ordinary Share — in a specially created management company (“NewCo”) responsible to the investors for the management of the property and, in particular, for the collection of rent from the tenants. Each ordinary share would carry a single vote.
These two elements are stapled together to form a combined security — the PINC. The two component parts are permanently attached to each other so that it is not possible to trade one without the other. Consequently, the investor’s holding of ordinary shares in “NewCo” will be in the same proportion as his share of the property’s rental income.
Income will be paid quarterly. The denomination of the individual PINC will be for the sponsors of each particular property to decide, but it is envisaged that each PINC will have a minimum value on flotation of £20,000. In practice PINCs, in the initial properties to be floated, will have a nominal value equal to one-thousandth of the property’s total capital value at the time of flotation.
