Nabarro Nathanson's tax and property finance partner, Peter Kempster, has called on the property and investment industries to come together to push for a single investment vehicle to increase the liquidity of property.
Speaking at a conference on real estate finance organised by the firm this month, Kempster berated property professionals and financiers for not working together to solve the problem posed by property illiquidity. “We must now coordinate our efforts and pool our proposals to create the definitive property investment vehicle,” he said.
The property industry had ignored many of the investment vehicles which were established after it had lobbied for them, claimed Kempster. Only one single asset property company has been formed since the Government permitted their creation recently, and that has since come off the market. And although authorised property unit trusts were allowed more than two years ago, there are only two currently on the market.
Kempster said the problem with unit trusts was that they were open-ended, so investors had the right to redeem units at any time. What was needed, he said, was a listable, closed-ended vehicle for which investors would pay no more tax than if they bought shares.