New Star has slashed the value of its flagship property unit trust by 17.8% in a vivid sign of collapsing confidence in UK real estate. Financial Times, Daily Telegraph

The New Star property unit trust, which invests in UK property, overtook many more established rivals to peak at £2.1bn, in part due to a high-profile advertising campaign. But the group yesterday told the London Stock Exchange it had cut its values as it blamed an 'adverse shift in sentiment' towards commercial property. The fund’s valuation is now £1.74bn.

The group said the vehicle remained liquid and was not restricting unitholders who wished to sell, in contrast to other funds. However, it said that sentiment had deteriorated sharply in recent days.

Shares in New Star fell 6p, or 2.5 per cent to 238p.