Vector Hospitality, the hotel real estate investment trust (Reit), looked to have rescued its £2 billion London flotation last night after cutting its price range in a bid to attract investors.

The flotation, set to be one of the biggest London listings this year, was in danger of being derailed by concerns over its complex management structure and wider fears over the global property market.

The company, which is planning to use the funds to buy £2.6 billion of hotel assets, was forced to cut its price range to between 875p and 900p, against the 995p-to-£11.15 range announced a fortnight ago.

The original range implied a market value of £2.02 billion to £2.26 billion, excluding debt of about £600 million.

The new range equates to a market capitalisation of between £1.75 billion and £1.8 billion.

The cut-price range looked likely last night to attract sufficient interest to get the flotation away.

The final price was due to be decided last night, but at the last minute the book-building process was extended until today.

Vector came under intense pressure after several big fund managers shunned the offering.

Standard Life Investments and Morley Fund Management went public yesterday with their decision not to buy shares in Vector, saying that they were unhappy with its external management structure, led by Richard Balfour-Lynn, the property entrepreneur.

Last week Cohen & Steers, the American investment firm that is the world’s largest specialist property investor, and Henderson Global Investors also ruled themselves out of buying shares.

Mike Bessell, Standard Life’s investment director for UK equities, said: “We do see very real corporate governance risks out of the complex management structure of this deal.”

Morley Fund Management, owned by the insurer Aviva, said: “We are not convinced by the management structure and the alignment of interests and the upside in the portfolio.”

At the heart of investors’ concerns is the role of Mr Balfour-Lynn, the Vector director who is the architect of the business.

He also runs Cameron Investment Managers, which has been appointed as external manager of Vector’s 71 hotels.

Mr Balfour-Lynn is chief executive of Marylebone Warwick Balfour, the quoted property firm that is selling its Hotel du Vin and Malmaison hotel assets to Vector.

He also founded the Alternative Hotel Group, which is supplying a tranche of De Vere and Village hotel assets to Vector.

One City source said: “All roads seem to lead to Richard Balfour-Lynn. That is a concern.”

Deutsche Bank, which is running the book-building on the float, working with Goldman Sachs and UBS, is understood to have been confident on Friday night of covering its book at the bottom of the original range of 995p to £11.15 a share.

However, concerns over the potential conflicts of interest were compounded by mounting scepticism over property valuations on stock exchanges around the world.

Yesterday Realia, the Spanish property firm, was forced to cut the price of its Madrid flotation.

Shares in both Land Securities and British Land, the UK’s two largest quoted property companies, are trading at a 15 per cent discount to their net asset values, after trading at premiums for much of last year, over fears that UK commercial property has peaked.

A source close to Deutsche Bank insisted that Vector’s yield of 5.5 per cent was far more attractive than the wider quoted UK market.

American investors look set to buy up to 45 per cent of the group’s shares, a higher than usual proportion, with Japanese institutions taking up to 10 per cent.

Vector Hospitality said that it had established a conflicts committee on its board and that this “mitigates or eliminates the effects of any potential conflicts”.

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