Market is ripe for senior debt IPOs

The pulled IPO of Swiss residential developer Peach Property Group is a reminder of how challenging the current environment is for floating a new company. But ICG-Longbow chairman David Hunter remains confident that his firm’s upcoming IPO will meet with more success.

'Peach Property's proposal is very different to our own. We're focusing on the debt market for a start, but we’re also focusing on the UK because it's the best market in Europe in terms of liquidity and transparency,' he noted.

The market is ripe for further debt vehicles like Longbow’s, agreed Timo Tschammler, the new managing director of JLL Germany. 'The market will continue to show demand for alternative debt vehicles like this, especially now that a lot of core banks have retreated,’ he told PropertyEU. ' I think we'll see more vehicles like this going forward as the sector evolves, which will increase the number of alternative finance suppliers and lenders,' he added.

Peach Property was not the first IPO to be shelved this month: Bahrain-based Arcapita also abandoned its planned IPO of P3 Pointpark Properties - the first planned property IPO in London since 2010 - saying there was more value to be had in 'not listing'. The company had initially hoped to raise around £250 mln via an IPO on the London Stock Exchange. P3 operates in 12 European countries and manages a portfolio of around 1.55 million m² in more than 50 distribution buildings in Europe.

However, according to some analysts, Arcapita's valuation of P3 was unrealistic, which may have dampened investor interest. In addition, some investors may have been spooked by the perception that Arcapita was a forced seller, even though that was not the case.

In March, Arcapita became the first Gulf-based firm to file for Chapter 11 protection in the US after it was threatened with legal action if it did not repay a hedge fund in full. Arcapita told PropertyEU it is now 'weighing its options' after cancelling the planned IPO.