One month after buying the massive city centre retail development in Birmingham, investment manager M7 Real Estate said it intends to issue shares in the building on the UK’s new property stock market.
M7 is a shareholder in IPSX, alongside other major property players British Land and Moorfield Group. M7 also backs property-related technology startups such as asset management software Coyote and procurement platform Unissu, and last year established a European tech venture fund.
The 700,000 sq ft Mailbox was acquired for around £190m from a joint venture of fund manager Brockton Capital and retail developer Milligan in December.
Mailbox is 95% let to high-profile tenants including Harvel Nichols, Heal’s and Paul Smith. M7 said the estate is the largest city centre mixed-use scheme outside London.
IPSX is aimed at opening up ownership of large commercial property assets to smaller investors. Owners can issue shares in part of their building, meaning they can benefit from increased liquidity while retaining a holding. If it takes off, the property exchange is expected to put added focus on brand and asset management quality as a result of increased public scrutiny.
There will be interest among property agents and landlords to see if the M7 decision is followed by a wave of copycat moves.
IPSX appeared to play down the announcement, reported in The Times. David Delaney, group chief executive of IPSX, said: “We cannot comment on individual issuers that are considering admission to IPSX. However, we can confirm that there has been strong interest in our market from both issuers and investors who are excited about the prospects and potential of a new regulated stock exchange designed specifically for real estate. From an issuer perspective in particular, this interest has increased significantly as markets have settled and confidence has started to return post-election. We look forward to a positive year ahead.”
Mailbox will be independently valued before floating. A valuation of around £200m is expected. M7 is reported to be expecting to raise £120m.