Welcome to our latest missive. At this time of year, we have usually just returned from the PwC European Real Estate Client Conference, one of the high points of the year. Sadly this year was online. The content was great, but we rather missed the dinners. It was also a reminder that it is ten years since John’s conference presentation and report, “Ammonites, extinction events and the real estate funds industry”. In view of the interest that the anniversary provoked, John is working on an update in time for our next newsletter.

Nothing on Brexit this time, as we are in the realm of complete guesswork. The Lord Mayor of London has this week complained that insufficient attention has been paid to the City and financial services. With just over a month to go, this warning is rather late in the day to be of any practical use.

EG lockdown diaries

John was delighted to be last week’s Estates Gazette “lockdown diary”. Although somewhat less profound than other contributors, it seems to have been a source of some enjoyment. You can find it here

Proposed tax changes for offshore life companies and UK funds

We covered this issue in our newsletter in March. The problem to be addressed arises as a result of the rules for property funds under the capital gains tax changes for non-residents holding UK property that came into effect in April 2019. The administrative burden of complying was a particular issue for offshore life companies. The Investment Association had proposed a portfolio exemption which it had been hoped would be announced in the Budget in March. HMRC have now proposed changes to address this - (draft) The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2021, which you can find here.  The proposed legislation is out for consultation until 16th December.


John was quoted in the Times on the importance of investor confidence in property valuations. You can find the article here.

As with audit, if stakeholders lose confidence in the integrity of the process, this will undermine the fundamentals that underpin the market. Perception becomes reality. As John mentioned in his quote in the Times, this is particularly key for open ended funds as valuations feed straight through into the net asset value used as the basis for subscriptions and redemptions. It is good that the RICS is taking this seriously, and we should all support the Indpendent review being undertaken over the next year by Peter Pereira Gray of the Wellcome Trust. We will be feeding back into this via the Association of Real Estate Funds (AREF). There will be more news on this shortly.


As covered in our previous newsletter, there is a comprehensive consultation on the Alternative Investment Fund Managers Directive being undertaken by the European Commission. The deadline for responses is 29th January 2021. It consists of 102 questions split into 7 sections:

  • Functioning of the AIFMD regulatory framework, scope and authorisation requirements
  • Investor Protection
  • International Relations
  • Financial Stability
  • Investing in Private Companies
  • Sustainability/ESG
  • Miscellaneous

John is now part of the working group that will be responding on behalf of AREF. AREF is also running a webinar for members on 16th December to provide background to the consultation and get member feedback.

You can download the consultation 
here and respond here.

You can find details of the AREF webinar and register 

Congratulations to UBS on its GRESB results

GRESB announced its ESG benchmark results yesterday. Congratulations to UBS on its success, particularly to its UK open-ended core UK commercial property fund, for which John is chair of the Supervisory Board, which retained its leadership position in the UK Diversified category for the fourth-year running. You can find more information here.


Regular readers of this newsletter, will know that we have been following the establishment of IPSX over the last few years, and John has been a speaker at some of their events. As most of you are probably aware, it is the first regulated stock exchange dedicated to the initial public offering and secondary market trading of property owning special purpose vehicles (SPVs). 

The exchange received its regulatory approval from the FCA in early 2019, and is now in the position to move forward with the announcement that fund manager M7 is to list two properties on the exchange, the Mailbox in Birmingham and Bridgewater Place in Leeds.

We believe that IPSX can provide a valuable addition to the UK investment market, particularly once a broad mix of investments are available and liquidity can be established. Although SPVs listed on IPSX are touted in some quarters as a route for retail investors to invest directly, we are less convinced by this. We think that the more likely route is for funds for retail investors offered through various different distribution channels to invest in IPSX listed shares, as a stand alone approach, as an investment along side REIT shares or as an investment along side direct property. For this to be achieved, the exchange will need to have enough SPVs listed for there to be diversity and liquidity. It is therefore good news that M7, who are a significant backer of the exchange, are bringing high quality assets to the market. 

We wish the best of luck to everyone at M7, The Mailbox REIT and IPSX for a successful launch in mid December.

Urban Splash

Akeel Malik (Fund Manager, Urban Splash Residential Fund) and Sam Lenehan (Associate Director, House by Urban Splash) presented on an Investment Property Forum webinar yesterday. You can find the recording here.  John makes a very brief appearance in a video as the chair of the investment committee of the Urban Splash Residential Fund.

Historical trivia

Our historical trivia in our previous newsletter finished with Jamie the Saxt, King of Scots (also James I, King of England from 1603). As that newsletter went out on 5th November, we obviously mentioned the attempt to blow him up in 1605. We continue with Jamie in this newsletter, looking in particular to something relevant to the possible direction of a trade deal with the United States, a topical matter in view of the outcome of the US presidential election. 

We refer, of course, to the King’s rather splendid "A Counterblaste to Tobacco” of 1604.

He was, it is fair to say, no great enthusiast for the new habit of smoking tobacco. As he noted in his conclusion, "A custome lothsome to the eye, hatefull to the Nose, harmefull to the braine, dangerous to the Lungs, and in the blacke stinking fume thereof, neerest resembling the horrible Stigian smoke of the pit that is bottomelesse.” For those that are interested, you can find the full text

So what does this have to do with the trade with Americas?

The Counterblaste came with a kick. James introduced in addition to the existing customs duty of two pence per pound of tobacco, a whopping tariff of six shillings and eight pence per pound of tobacco imported, also in 1604. You can find the text 
here. As with so many of such things, it resulted in unintended consequences. Tobacco plantations were established in the colony of Virginia which benefited from tariff free imports of goods into the UK. This went through various convoluted steps until 1624, at which point James established a royal monopoly for the import of tobacco from Virginia. This was intended to be a temporary measure to support the Virginia colony whilst other industries were set up to prepare the economy for the imminent collapse of the fad for smoking tobacco. 

As a result of this, all trade in tobacco was to be between the colony and England. The Governor of Virginia was instructed "not to suffer any trade with the Hollanders who are now freighting ships for that purpose”.

Not only was Jamie the Saxt prescient in identifying the very transient nature of smoking as a habit, he also spotted that trading with the Hollanders could be nipped in the bud.

As usual, feel free to forward this email to others for whom it may be of interest.  If this message was forwarded to you, you can sign up to the mailing list here, and see the previous editions of this mailing here  You can unsubscribe from the list using the links at the bottom of this message.  Our privacy policy can be found here.

Helen Forbes
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