Vector pulls out of £2b floatation

Vector, the UK’s first hotel REIT (real estate investment trust) has fallen at the last hurdle after fears about a decline in the property market deterred investors.

The £2b floatation of Vector Hospitality was pulled at the last minute, despite a reduction in the share price yesterday, after it failed to attract enough investment, according to the Times today.

It now appears the floatation has been postponed indefinitely as sources close to the deal blamed softening market conditions, compounded by the floatation of Spanish real estate company Realia for 20% below its original valuation earlier in the week.

However, the management structure of the REIT has also been criticised by investors, worried about the potential conflicts of interest for Vector director Richard Balfour Lynn, who is also chief executive of Marylebone Warwick Balfour, which owns Hotel du Vin and Malmaison, and founder of the Alternative Hotel Group, which comprises De Vere and Village, which was selling assets to Vector.

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By Emily Manson

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