Mailbox REIT plc makes history as first company to list on IPSX

Maiden listing on the UK’s newest regulated stock exchange marks new chapter in commercial real estate investing

LONDON: Mailbox REIT plc has become the first company to be admitted to trading on IPSX, the International Property Securities Exchange (IPSX), marking an historic moment for the UK’s newest stock exchange – the first to be launched in 7 years in the UK.

The Company has raised £25.85 million from the issue of 25.85 million Ordinary Shares at a price of £1.00 per share representing c. 30.5 percent of the issued share capital on admission.

The announcement heralds the opening of the exchange and the dawn of a new era in real estate investment, opening up this £1 trillion asset class to a much wider group of investors.

IPSX announced that 84,850,000 shares in Mailbox REIT plc have today been admitted to trading on IPSX’s Wholesale market under the ticker “MBOX”.

Mailbox REIT plc is the owner of The Mailbox, which is located on a 4.8 acre canal side site in Birmingham, the UK’s second largest city. It comprises approximately 698,000 square feet of primarily office space, anchored by the BBC, with a complementary, ancillary retail and leisure offering.

Mailbox REIT plc was admitted to trading at 9am this morning on the IPSX Wholesale Market having raised £25 million by way of a placing of ordinary shares. WH Ireland Limited was IPSX Lead Adviser and Broker on the placing and offer. Market liquidity will be provided by Peel Hunt and WH Ireland.

Alan Ramsay, UK Chief Executive of IPSX said: “This is an historic moment in real estate investment, and we are very proud for the exchange to officially go live today. We are delighted to have worked with M7, the current owners and asset managers of The Mailbox, and we warmly welcome Mailbox REIT plc to our IPSX Wholesale Market. Congratulations to all the team in delivering this historic first admission to IPSX. We look forward to announcing and welcoming further new admissions in the near future.” 

The IPSX platform has been established with market leading technology partners which include Nasdaq, GoldenSource, Quant House and Scila.  The platform has been integrated with leading trading technology and market data vendors including Fidessa, Iress and Morningstar.

IPSX has focussed on increasing the number of Trading Members ahead of launch and recently announced the admission of Clear Capital Markets, Hobart Capital Markets LLP and Pello Capital in London and new regional members, Liverpool’s Blankstone Sington Ltd and Midlands based Albert E. Sharp. They join IPSX’s existing Trading Members including Canaccord Genuity, WH Ireland, Panmure Gordon, Peel Hunt, Jarvis Investment Manager and the Share Centre.

Mailbox REIT will become the first company to undertake an initial public offering on IPSX, having issued 84,850,000 Ordinary Shares with a nominal value of £0.10 each in the company , which have been admitted to trading (“Admission”) on the Wholesale segment of IPSX.

The Company has raised £25.85 million from the issue of 25.85 million Ordinary Shares at a price of £1.00 per share representing c. 30.5 percent of the issued share capital on admission.

The capital has been raised from a number of institutional and family office investors including IWG plc, the global leader in flexible workspace solutions, which is also an occupier of the Mailbox under an innovative new leasing structure. M7 Real Estate Ltd will retain ownership of approximately 70 percent of the Company’s share capital after Admission. The Company ISIN will be GB00BM9BWM32 and SEDOL BM9BWM3. WH Ireland Limited is acting as IPSX Lead Adviser.

Mailbox REIT aims to provide investors with the opportunity to gain exposure to the long dated income streams, underpinned by very low-risk high-profile tenants, and performance of a prime, office-led mixed use property in central Birmingham.

Investors are also expected to benefit from potential income and valuation enhancement resulting from planned asset management initiatives. The Company is targeting an initial yield of approximately 7 percent.

The Mailbox comprises approximately 698,000 square feet of primarily office space, with a complementary, ancillary retail and leisure offering, located on a 4.8acre waterside site in the heart of the UK’s second largest city, a five-minute walk from Birmingham New Street Station. Independently valued at £181 million, the Mailbox produces a Passing Rent of c.£8.84million per annum, with an Estimated Rental Value of £15.05 million (assuming full occupancy).

Rental income is derived from 39 tenants with a long weighted average unexpired lease term (“WAULT”) of 14.25 years to break (14.6 years to expiry)as at 31 March 2021. Five tenants represent approximately three-quarters of the rent roll on a WAULT of approximately 16 years.

The Directors and the AIFM consider the top tenants (The British Broadcasting Corporation, Q-Park Limited, WSP Management Services Ltd and Harvey Nichols Stores Ltd, etc.) to be low or very low risk from a credit perspective based on their Credit Safe scores.

83.5 percent of Mailbox’s rent was collected for the December Quarter Day 2020(taking into account concessions or monthly payment plans), with 75.5 per cent and 77.3 per cent collected for the quarters starting January and April 2021 respectively.

The Company is currently in the process of converting level one of the Mailbox from retail into 50,000sq ft of flexible office space which will be operated by IWG plc under its Spaces co-working brand under a new 10 year agreement. The innovative new arrangement will see occupiers of the Spaces offices pay rent directly to the Mailbox REIT with IWG plc’s management fees based on a percentage of rent received.

Over the next three to five years, the property will be further repositioned for growth as a pre-eminent ‘Live Work Play’ destination.M7 Real Estate Financial Services Ltd a wholly owned subsidiary of M7 Real Estate Ltd, will act as alternative investment fund manager to the Company. M7 Real Estate will act as asset manager to the Company’s subsidiaries in respect of the Property.

Stephen Barter, chairman of Mailbox REIT, commented: “In becoming the first company to be admitted to and have its shares traded on IPSX, Mailbox REIT has carved out a unique place in the history of real estate capital markets investment.

The Board and I look forward to working on behalf of the Company and its shareholders as we emerge from the worst of the pandemic and towards a brighter outlook where Birmingham is set to benefit from positive structural trends, including continued decentralisation, which will help support the Mailbox’s target returns alongside the active asset management plan already underway.”

Richard Croft, Executive Chairman of M7 Real Estate, added: “M7 is incredibly proud to be part of this landmark occasionin our sectorand building on this momentum we are now advancing our plans to bring Bridgewater Place House in Leeds to market as the second IPO on IPSX in the coming months. Bridgewater Place House is another flagship regional UK office building, being the tallest building in Yorkshire and offering income returns underpinned by strong tenants such as EY and multinational law firms DWF and Eversheds.

“The Mailbox offers long dated income streams, underpinned by very low-risk high-profile tenants, as well as significant income and value enhancement potential. The investment is further supported by the strengthening fundamentals of the Birmingham market, which is attracting growing occupier demand with a number of major blue-chip companies moving into the city, as seen most recently with Goldman Sachs International’s announcement of its intention to open a technology centre there.

With an improving outlook, an expected economic recovery and by advancing our strategic plans for Mailbox REIT, we are well positioned to deliver for investors as a publicly traded company on IPSX.”

IPSX is the world’s first regulated securities exchange dedicated to the initial public offering and secondary market trading of companies owning single institutional grade commercial real estate assets and multiple assets with commonality. The exchange offers investors transparency and liquidity to trade shares in individual properties listed on the exchange.

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