22 January 2007
Property developer Richard Balfour-Lynn is in discussion with Royal Bank of Scotland to start up a real estate investment trust (Reit) worth around £2 billion.
Reits, which are new to the UK, are investment vehicles that don't pay capital gains and corporation tax and the income must be distributed to investors as dividends.
Balfour-Lynn would include his hotel properties worth around £1.3 billion, including the Grand in Brighton and Cavendish in London's Mayfair. Analysts say that RBS would be a partner in the Reit by putting up its own hotels including the Hiltons worth around £1 billion.
The launch if agreed would be in about six months.
The UK-listed property sector could double in the next five years from £50 billion to £100 billion if Reits are successful, according to analysts Lehman Brothers.