Mailbox, a newly-launched REIT with M7 acting as asset manager, is set to become the first single-asset company to list its shares on the new IPSX stock exchange.
The firm, which owns the Mailbox, a large prime office-led mixed use property in Birmingham valued at £179 mln, said on Thursday that it plans to raise up to £62.5 mln (before expenses) through the issue of new shares at a price of 100 pence apiece.
The company will apply for the stocks be admitted to trading on the IPSX Prime segment of International Property Securities Exchange (IPSX). 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 companies owning single institutional grade real estate assets and multiple assets with commonality.
M7 Real Estate, the asset manager, will retain indirect ownership of approximately 46% of the Company’s share capital after Admission.
The Mailbox comprises 698,000 sq ft of space located on a 4.8 acre canal side site in the UK’s second largest city and was the Royal Mail’s former sorting office. The property’s income is diversified across a number of uses including office (47.6% by passing rent), car parking (18.9%), leisure (21.2%), retail (11.4%) and other (1%). It produces a passing rent of £9.3 mln per annum with an Estimated Rental Value of £12.8 mln (assuming full occupancy).
The asset has performed well under the Covid-19 pandemic based on the rent collection with receipts of 82.3% and 68.7% for the March and June 2020 Quarter Days, respectively (as at 6 August 2020), compared to 96.2% for the December 2019 Quarter Day.
Originally completed in 1970, between 1998 and 2000 the building was converted to a major mixed-use scheme incorporating 144 residential units (not part of the Property) and over the past eight years has benefitted from a major £50 mln programme of refurbishment and improvements before being acquired by the M7 Real Estate.
The company is targeting an initial annual dividend payment of 5 pence per Ordinary Share equating to a yield of 5% per annum by reference to the Offer Price. It will be chaired by Stephen Barter who has over 40 years’ experience in real estate including a number of senior leadership roles such as chairman of Real Estate Advisory at KPMG, UK Chief Executive Officer of Qatari Diar (the property arm of the Qatar Investment Authority), Group Projects Director and a member of the Executive Committee at Grosvenor (the Duke of Westminster’s private international property company), Head of European Real Estate at Babcock & Brown and an equity partner at Richard Ellis (now CBRE).
Stephen Barter, chairman of Mailbox REIT, commented: ‘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.’
Richard Croft, Executive Chairman of M7 Real Estate, added: ‘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. 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.’
The M7 Group manages over 830 assets comprising 66 million sq ft valued at €5 bn on behalf of real estate investors such as Blackstone, Centerbridge, M&G and HIG Capital.
David Delaney Group Chief Executive, IPSX said: 'This is a watershed moment in the history of IPSX, which has the capacity to be a great success story in UK innovation. The Intention to Float of the Mailbox REIT by asset owners M7, is a huge vote of confidence in the Exchange and of our ability to reach new investors. Many years of hard work have been undertaken to get the exchange to this stage. To have launched our first IPO in this extraordinary year not only reflects the strength of real estate as an investment class but also the compelling proposition that IPSX represents as a platform allowing all investors to access and selectively own shares in companies owning single commercial property assets in a liquid and regulated way.'
