30 Sep 2021

M7 to list £120 million retail warehouse portfolio on IPSX


M7 Real Estate (“M7”), the pan-European investor and asset manager, announces that an application is intended to be made by M7 Regional E-Warehouse REIT PLC (the “Company“) for the admission of the Company’s shares to trading on the Wholesale segment of IPSX by way of an introduction (the “Admission“). On Admission, the Company proposes to acquire a £120 million portfolio of UK retail warehouse assets from M7 Real Estate Investment Partners VIII (the “Fund”).

The proposed Admission aims to allow the c. 40 investors in the Fund to benefit from transferring and onshoring their investment from a closed ended, Jersey domiciled private investment vehicle to an investment in a U.K. vehicle which offers daily liquidity via a public listing on a regulated stock exchange and benefits from the advantages of the U.K.’s REIT regime.

The portfolio comprises 18 retail warehouse properties located across the U.K., assembled by M7, following the Fund’s inception in July 2018. The 978,317 sq ft portfolio is fully let to a diversified base of 53 occupiers and has delivered consistently high rent collections prior to and since the outbreak of the COVID-19 pandemic. Rent collections for Q2 2021 currently stand at 93% and are expected to revert to 100% in the coming quarters.

Under the IPSX regulations, the Company’s application for Admission to trading will be based on the commonality of the assets held within the portfolio that the Company proposes to acquire from the Fund.  The current investors of the Fund have indicated their support for these proposals.

Upon Admission, M7 Regional E-Warehouse REIT PLC will become the second vehicle to successfully launch on IPSX, following the IPO of Mailbox REIT PLC in May of this year.  IPSX is a 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.  IPSX Wholesale is a market exclusively for institutional and professional investors.

Richard Croft, Executive Chairman of M7 Real Estate, said: “These proposals and the Company’s  listing on IPSX provides multiple benefits for the Fund’s current investors, not least the daily liquidity afforded by transferring from a closed ended private fund to a U.K. investment company with publicly traded shares on a regulated exchange, as well as the advantages offered through the U.K REIT regime, which will become a particular focus for investors ahead of changes to corporation tax in 2023.

“We have already proved the concept of IPSX with Mailbox REIT which, since its IPO earlier this year, has traded consistently at a premium to its opening share price at launch, declared a maiden dividend in line with target and offered liquidity to investors where required.  The proposed floatation of M7 Regional E-Warehouse allows us to build on that momentum by bringing to market a high-quality portfolio of retail warehouses that produces visible and growing income streams as well as the opportunity for capital appreciation.  Retail or ‘e’ warehouses is one of the few segments of the retail market that has continued to perform well despite the woes experienced in other areas of the sector and it continues to offer investors the opportunity to take advantage of the yield arbitrage between industrial and retail warehousing.

“One of IPSX’s greatest attributes is that, through securitisation, it enables quick and equal access to investment in commercial real estate, a global asset class that has a value of more than $300 trillion and yet is a closed shop to many of those operating outside the institutional market.”

This is a financial promotion and is not intended to be investment advice. The content of this announcement (the “Announcement“), which has been prepared by and is the sole responsibility of M7 Regional E-Warehouse REIT PLC (the “Company“), has been approved by M7 Real Estate Financial Services Ltd (the “AIFM“) solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended) (“FSMA“). This communications is only directed at investors in the UK. Please visit link for full details.

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