M7 Multi-Let REIT, a newly-established firm set up to invest in UK industrial and office property, said it aims to raise up to £300 mln (€335 mln) in an Initial Public Offering on the London stock exchange.
The company, which is managed by M7 Real Estate, will offer shares at an issue price of 100 pence per share on November 7, with the listing going ahead only if the new REIT raises at least £147 mln.
According to its sponsor, M7 Multi-Let REIT is targeting a quarterly dividend yield equating to 6.5% per annum by reference to the issue price once fully invested. In addition, the company is targeting a total shareholder return of at least 10% per annum.
'The UK private sector is dominated by SMEs, which have consistently demonstrated more stable growth than large businesses and UK multi-let regional real estate assets play a critical part in facilitating that growth,' commented Stephen Smith, Chairman of M7 Multi-Let REIT. 'At the same time, the sector is often overlooked by investors, being considered by some as inefficient due to the small individual lot sizes and/or because of the requirement for active and intensive management. This provides what we believe is a compelling opportunity to acquire real estate at attractive yields, with value-add potential and often at below replacement cost.'
M7 Multi-Let REIT has already agreed to buy 93 property assets across two UK portfolios for £120 mln, on condition that its listing is successful. The portfolios, known as Marble and REIP II, produce an annual rent of £10.8 mln, representing a net initial yield of 8.64%. It has also identified another £400 mln of acquisition opportunities, according to Richard Croft, Chief Executive Officer of M7 Real Estate.
'This puts us on course to fully deploy the remaining proceeds within nine months following Admission,' he added.
M7 Real Estate was established in 2009 and currently manages over 995 industrial, office and retail properties worth €4.6 bn, with its UK portfolio currently valued at £1.1 bn.
