M7 Real Estate is to become the first company to float a real estate asset on the UK’s International Property Securities Exchange (IPSX).
IPSX was established to enable the listing of individual properties, giving investors a new way to invest in real estate.
M7 Real Estate plans to list Mailbox REIT, which will own a single mixed-use complex in Birmingham, acquired towards the end of last year.
David Delaney, group chief executive of IPSX, described it as a “watershed moment” for the exchange.
M7 is hoping to raise up to £62.5m (€67.2m). The Mailbox, a 1m sqft office-led asset in Birmingham and the UK’s largest mixed-use asset outside London, was recently valued at £179m.
Stephen Barter, chairman of Mailbox REIT, said: “Mailbox REIT provides investors with the first-ever opportunity to invest in a single-asset REIT listed on the new IPSX, an FCA regulated exchange.
“Through Mailbox REIT, investors will be able to gain exposure via liquid tradeable shares to a significant landmark, office-led, mixed-use asset in the UK’s largest regional city and economy which, without IPSX, would otherwise only be accessible to institutional investors.”
The first initial public offering (IPO) comes more than two years after M7 Real Estate increased its stake in the platform and M7’s executive chairman Richard Croft was made a non-executive director.
“After almost a decade of record low interest rates and no sign of any change to that status quo, we have an environment where investor appetite for asset-backed investments underpinned by high quality income is arguably stronger than ever before,” said Croft.
“We are therefore firm believers in IPSX’s potential to help alleviate that demand, while at the same time transforming and democratising real estate investment, by making prime landmark assets such as the Mailbox available to all types of investors, large and small, through liquid shares that are tradeable on a new regulated stock exchange.
“I believe Mailbox REIT is a compelling opportunity to invest in a prime regional office-led property at an attractive entry point relative to historic valuations.”
UK REIT British Land and fund manager Moorfield have also provided financial backing.
IPE Real Assets understands that IPSX hoped to hold its first IPO in 2019, but last year’s uncertainty around Brexit and the general election – and, more recently, the COVID-19 pandemic – have delayed developments.
IPSX now hopes to list a number of assets. “We have a strong pipeline of further IPOs and we are eagerly anticipating their introduction to the market,” said Delaney.
IPSX potentially offers a new liquid way for investors to gain access to individual property assets, and also provides a new means of exiting investments without selling outright while retaining asset management.
The exchange said: “Unlike real estate funds or REITs, investors can select which individual assets they do or don’t invest in, as well as their level of exposure.
“The level of disclosure is such that investors will have much greater transparency on individual asset performance. IPSX operates like any regulated stock exchange and therefore investors will benefit from daily liquidity, unlike open-ended funds which can be gated.”
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