Matrix European Real Estate Investment Trust has announced it will slash its dividend by half from July to September 2008.

The Guernsey-based company said its reduction of its dividend was a ‘prudent’ reaction to the credit crunch, and the interim dividend – now 5p – would save it over £1.9m.

The company, which is listed on the London Stock Exchange, said: ‘There is evidence of continuing negative yield shift in many European Property markets and this is likely to result in a further decline in the value of some of our property assets.

‘Transactional activity in many markets has also slowed due in part to the difficulties in the credit markets.

‘Whilst the Company continues to benefit from a portfolio diversified both geographically and in terms of tenant mix and remains in compliance with its banking covenants at the current time, the board believes the reduction of the dividend is prudent so as to result in a saving in excess of GBP £1.9 million in respect of the September quarter end dividend.’