REAL ESTATE - Two IPOs announced last week suggest that AIM, the London Stock Exchange’s junior bourse, is losing its near-exclusive power to attract global real estate companies.
Kenmore European Industrial Fund announced that it is to list £140m shares on the London Stock Exchange.
The Guernsey-registered closed-end investment company will aim the share offer at both institutional and high-net-worth private investors. It chose the main bourse, rather than the junior AIM, because it will give retail investors access to tax-efficient vehicles such as self-invested pension plans (SIPPS).
Kenmore has identified off-market deals as potentially delivering “a bit better value” and allowing time for the firm to conduct proper due diligence – necessary because the firm expects vendors to be private owners rather than commercial developers.
“Continental Europe is a less sophisticated market for selling,” said Rob Brooks, managing director of Kenmore Property Group. “In the UK, most vendors have a high level of preparation for sale – the due diligence is done. Europe is a less sophisticated, more immature market. We’re buying off local people with different pricing aspirations.”
Describing the fund’s name as a “misnomer”, Brook said it would target “multi-tenanted business parks in urban areas, rather than large-scale manufacturing. These places don’t have office space but they do have some storage and light assembly space.”
He based his positive prognosis for the flotation on the “service industry type element” of the segment and the fact that target locations such as Paris “need this type of space”.
Meanwhile, ProLogis European Properties (PEPR), the real estate investment fund that owns 11 distribution facilities across Europe, will float this month.