IPSX UK, the new property stockmarket, has received approval from the Financial Conduct Authority to launch its second market, aimed at institutional investors only.
The company said IPSX Wholesale has been designed to provide commercial real estate owners with an onshore market that can accept a variety of different corporate structures within a flexible regulatory environment, including JV REITs.
Issuers owning assets which they intend to repurpose or retrofit will be able to seek admission to IPSX Wholesale as an alternate source of fundraising, provided they anticipate the asset becoming stabilised and income-producing within a suitable timeframe. As well as stabilised assets, IPSX Wholesale is open to development and regeneration projects.
David Delaney, group chief executive, said: “IPSX Wholesale provides an ideal platform for real estate owners looking for a venue which has a huge amount of flexibility but within the framework of a closely supervised exchange-regulated market. IPSX Wholesale is a new market that will support all the traditional property activities that UK real estate owners would want to do, in a recognised, transparent and more liquid environment.”
Further to this broader range of eligible assets, the types of issuers eligible for admission to IPSX Wholesale could include more complex ownership structures, more complex legal arrangements and more unusual tenancy arrangements.
- IPSX Wholesale will not prescribe a minimum free float. Issuers can seek admission to IPSX Wholesale with a free float lower than the 25% requirement of IPSX Prime
- The loan-to-value requirement for IPSX Wholesale is set at a maximum of 80%, compared to 40% for IPSX Prime, allowing companies with more leverage to seek admission to trading
- Unlike IPSX Prime, IPSX Wholesale issuers do not have to produce a prospectus for approval by the FCA. An admission document which complies with requirements outlined in the rules for IPSX Wholesale will be prepared by the Lead Adviser to set out the investment opportunity
Delaney added: “Many traditional routes for investing in real estate have been called into question by recent events in the investment market. The liquidity challenges and gating risk surrounding property funds is driving investors to reconsider their allocations. Both of our markets of IPSX Prime and now IPSX Wholesale will give professional investors great choice and direct access into real estate asset owning companies whilst limiting the risks from which some of the other investment routes suffer.”
As with IPSX Prime, IPSX Wholesale issuers are required to appoint an IPSX Lead Adviser to take them through the admission process, and an IPSX Approved Valuer to produce a RICS compliant Red Book Valuation. IPSX Wholesale will be launching in the spring of 2020.
Investment in IPSX Wholesale issuers will be available to Institutional Investors only. Examples of these include:
- Unit trust scheme trustees/managers authorised by the FCA, or equivalent
- Open-ended investment companies
- Collective investment schemes
- Pension fund trustees/managers
- Insurance companies
- Firms authorised by the FCA, or equivalent
- Sovereign wealth funds
- REITs and offshore REIT equivalent