Gravis Capital announces £300mn IPO of GCP Co-Living REIT on LSE

Gravis Capital announces £300mn IPO of GCP Co-Living REIT

LONDON, UK: Gravis Capital Management Limited announced intention to launch an initial public offering (IPO) of GCP Co-Living REIT on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue of 300 million ordinary shares at an initial issue price of £1.00 per Ordinary Share.

GCP Co-Living REIT plc is a newly established, externally managed investment company, which it is intended will carry on business as a Real Estate Investment Trust (REIT) for the purposes of Part 12 of the Corporation Tax Act 2010 (and the regulations made thereunder), subject to meeting the necessary qualifying conditions.

The company will invest, predominantly, in independent Co-Living Assets, both operational and under development, let to a diversified mix of residents, located in urban centres in the UK and Ireland where there is a shortage of high quality, affordable residential accommodation.

Co-Living is a residential model, where private living spaces are combined with extensive communal amenities.

Co-Living Assets consist of large-scale, purpose-built, professionally managed, shared living residential accommodation, comprising high quality private apartments (typically, studio apartments) that are supplemented by extensive communal facilities, services and amenities all included within a single fee (that includes all utilities), appealing to the on-demand generation.

The company’s Investment Manager will be Gravis, an experienced manager with approximately £3 billion of private, institutional and public capital under management, and which has extensive experience in investing in the Living sector. To be fully aligned with investors, Gravis intends to make an investment of £3 million at IPO and 10 per cent. of the annual investment management fee (net of any applicable tax) will be applied to the purchase of Ordinary Shares, both subject to a 12-month lock-up.

Akur Limited is acting exclusively as Financial Adviser for the Company and Stifel Nicolaus Europe Limited is acting as Sole Bookrunner and Placing Agent on the Company’s IPO.

All proceeds expected to be fully invested following IPO into a c.£425 million high quality portfolio of three prime London Co-Living Assets held under contractual exclusivity (the “Exclusivity Assets”). Two of the Exclusivity Assets are operational and represent approximately 90 per cent. of all purpose-built, operational Co-Living beds in London.

The net proceeds from IPO, along with associated gearing, will deliver day one income for investors and forward fund a prime development asset which is expected to benefit from a valuation uplift on completion.

With recognition of Co-Living’s key role in addressing the housing shortage issues in urban centres (for example, as set out in the Mayor of London’s “The London Plan” published in March 2021), the sector is becoming institutionalised and is attracting significant interest from real estate investors and specialists.

Nick Barker, Director at Gravis and Fund Manager of GCP Co-Living REIT, said: “The Co-Living sub-sector of the residential market is attracting significant interest from real estate investors and specialists, as well as local government and planning agencies who see the potential of this housing model to address fundamental inequalities in the residential sector.

We are seeing a generation which has enjoyed the benefits of PBSA now seeking those same benefits as they progress in their professional lives. With a focus on mental health and wellbeing derived from the shared living experience, as well the environmental benefits of purpose-built assets which meet high sustainability standards, we believe Co-Living has exciting prospects for the future.

We are pleased to have secured exclusivity on behalf of GCP Co-Living REIT to acquire three prime London based Co-Living Assets. The two operational assets deliver all the benefits of the Co-Living model, including the provision of stable revenue generation in spite of the recent pandemic. The development ready asset will serve to boost returns on its completion and provide a high quality, amenity rich accommodation for residents.”

Rollo Wright, Chief Executive of Gravis, said: “At Gravis, we believe in providing investors with long-term, predictable income through projects that offer a human dimension and that will be needed for many years to come, forming part of the social and economic infrastructure. As a fore-runner in the student accommodation sector, we have turned our attention to a new and innovative investment proposition – a Co-Living REIT – another first for the public markets in the UK. Building on our established credentials in the Living sector, we believe that GCP Co-Living REIT represents an attractive investment opportunity for prospective investors.”

Add a Comment

Your email address will not be published. Required fields are marked *