Life Science REIT plans £300 million IPO on London Stock Exchange

Life Science REIT plans £300 million IPO on London Stock Exchange

LONDON, UK: Life Science REIT plc expressed intention to launch an initial public offering (IPO) on the Alternative Investment Market (AIM) of London Stock Exchange.

Life Science REIT will issue 300 million ordinary shares of £0.01 each in the capital of the company at an issue price of 100 pence per ordinary share.

This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure to an attractive and growing real estate sector.

Global investment in life sciences is increasing, whilst there is also an ongoing trend for life science companies to locate themselves in specific geographic clusters centred on key innovation centres including around Oxford, Cambridge and London’s St Pancras.

By targeting the Golden Triangle, Life Science REIT will benefit from assets located in close proximity to four of the world’s top ten universities for life science and global life science innovation, world leading research and teaching hospitals, and a supply and demand imbalance for specialist properties, which should ensure strong potential for rental growth over the coming years.

The Company will invest in a diversified portfolio of properties across the UK which are typically leased or intended to be leased to tenants operating in, or providing a benefit to, the life sciences sector. Examples of Life Science Properties in which the Company will seek to invest, include wet and dry laboratories, offices and co-working space, manufacturing and testing facilities, and data centres.

The Company has identified a £445 million pipeline of projects of which c.£305 million is under exclusivity or in an advanced state of negotiations.

The Company’s investment objective is to provide shareholders with an attractive level of total return with a focus on capital growth whilst also providing a growing level of income by investing primarily in a diversified portfolio of UK properties that are leased or intended to be leased to tenants operating in the life science sector.

The Company is targeting a net asset value (NAV) total return in excess of 10 per cent per annum and an initial dividend yield of 4 per cent per annum, with an intention to grow to 5 per cent per annum in the early years.2, 3

Life Science REIT has appointed Ironstone Asset Management Limited as its Investment Adviser which includes a management team with long standing UK real estate sector experience, led by Simon Farnsworth. Certain individuals of the management team of the Investment Adviser have committed to invest circa. £3 million in the Issue, which will be on pari passu terms with all other investors.

Claire Boyle, Chair of Life Science REIT plc, said: “We are delighted to announce the proposed IPO of London’s first REIT focused on the growing life sciences sector, driven by the emergence of a favourable investment environment formed by combination of long term macro and specific, occupational and investment trends aligning. The UK’s increasing focus on life science spending has led to increased demand for high quality real estate in key locations, a focus that has been sharpened by the global experience of the Covid-19 pandemic. Quality Life Science Properties are centred on a small number of key geographic locations in the UK where supply is constrained, demand is high, vacancy is low and rents are rising, offering attractive opportunities for investment.

Demand for Life Science Properties in key locations continues to rise and we believe our highly experienced team is well placed to capitalise on the opportunity. Meanwhile it is the REIT’s target to provide shareholders with an asset backed combination of income and capital growth, with a target NAV total return of over 10 per cent. per annum and an attractive initial dividend yield of 4 per cent in respect of the period to 31 December 2022growing to 5 per cent per annum in the early years.

The REIT will offer both institutional and retail investors a differentiated investment opportunity with strong underlying asset backed fundamentals that seeks to provide regular income with capital growth.”

Simon Farnsworth, Managing Director of Ironstone Asset Management Ltd, the Company’s Investment Adviser, said: “We are extremely excited at the prospect of listing Life Science REIT plc on the AIM market of the London Stock Exchange in this increasingly important real estate sub-sector, not currently represented by a specialist in the listed market. Given, the significant pipeline under exclusivity or in an advanced state of negotiations, it is planned that the REIT will have access to a large, high quality portfolio consisting of both income producing operational assets, and exciting development opportunities, to provide portfolio scale from an early stage.

The Investment Adviser’s capability to source off-market opportunities outside of a competitive process has enabled us to create a pipeline of well-located quality assets. Given the strength of the management team’s network, combined with our first mover advantage in this new listed sub-sector, the REIT is hoping to become a first-stop for institutions and private investors alike seeking to add life science real estate exposure to their portfolios.”

Life Science REIT expects to publish the Prospectus in connection with the Issue later this week. Admission is expected in mid-November.

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