Mailbox REIT, a single asset REIT which owns the Mailbox, a large prime office-led mixed use property in Birmingham, has successfully listed its shares on the International Property Securities Exchange (IPSX), the UK's newest regulated exchange for securitised commercial real estate.
Mailbox REIT is the first company to undertake an initial public offering on IPSX, having issued 85 million ordinary shares with a nominal value of £0.10.
The company has raised £25.8 mln from the issue of 25.8 million shares at a price of £1.00 per share representing 30.5% of the issued share capital on admission. The capital has been raised from a number of institutional and family office investors including IWG, the flexible workspace solutions group, which is also an occupier of the Mailbox under an innovative new leasing structure. M7 Real Estate will retain ownership of approximately 70% of the company’s share capital after admission.
The firm originally planned to float on the new market back in October 2020, before pushing back plans to November, and eventually shelving its intentions until 2021.
IPSX is a new Regulated Investment Exchange regulated by the FCA and is the world’s first such exchange dedicated to the initial public offering and secondary market trading of institutional grade commercial real estate assets.
Mailbox REIT aims to provide investors with the opportunity to gain exposure to the long-dated income streams, underpinned by very low-risk high-profile tenants, and performance of a prime, office-led mixed use property in central Birmingham. Investors are also expected to benefit from potential income and valuation enhancement resulting from planned asset management initiatives. The company is targeting an initial yield of approximately 7%.
The Mailbox comprises approximately 698,000 sq ft of primarily office space, with a complementary, ancillary retail and leisure offering, located on a 4.8 acre waterside site in the heart of the UK’s second largest city.
Valued at £181 mln, the Mailbox produces a passing rent of £8.84 mln per annum, with an Estimated Rental Value of £15.05 mln (assuming full occupancy). Rental income is derived from 39 tenants with a long weighted average unexpired lease term (WAULT) of 14.25 years to break.
The company is currently in the process of converting level one of the Mailbox from retail into 50,000 sq ft of flexible office space which will be operated by IWG under its Spaces co-working brand under a new 10-year agreement. Under an innovative new arrangement, occupiers of the Spaces offices will pay rent directly to the Mailbox REIT with IWG’s management fees based on a percentage of rent received.
Stephen Barter, chairman of Mailbox REIT, commented: ‘In becoming the first company to be admitted to and have its shares traded on IPSX, Mailbox REIT has carved out a unique place in the history of real estate capital markets investment.’
Following the listing, M7 said that it is now advancing plans to bring Bridgewater Place House in Leeds to market as the second IPO on IPSX in the coming months. Richard Croft, Executive Chairman of M7 Real Estate commented: ‘Bridgewater Place House is another flagship regional UK office building, being the tallest building in Yorkshire and offering income returns underpinned by strong tenants such as EY and multinational law firms DWF and Eversheds.’
