BWP REIT announces £35 million IPO to fund Bridgewater Place acquisition

LONDON, UK: BWP REIT plc has announced its intention to raise £35 million through the issue of 35 million new ordinary shares at an issue price of 100 pence per share. BWP REIT is a newly formed single asset company established to acquire Bridgewater Place, an office-led mixed use property situated in a prime location in central Leeds which has been independently valued at £63 million (as at 30 August 2022).

 The Company will apply for all of its issued and to be issued Ordinary Shares to be admitted to trading on the Wholesale segment of the International Property Securities Exchange (IPSX), the world’s first regulated exchange dedicated to single asset real estate companies and those owning multiple assets with commonality.

The company has exchanged contracts for the acquisition of Bridgewater Place. The acquisition will initially be undertaken by way of the grant of a 999-year lease of the internal commercial areas of the Property to M7 BWP Propco Limited, a wholly owned subsidiary of BWP REIT.

Propco will also be granted a call option to acquire the freehold titles in the future for £1. The Issue, debt facility and issue of £23 million of Loan Notes will enable the Company to acquire the Property and undertake a comprehensive asset management plan to fully reposition the Property by undertaking essential fire safety and cladding works, creating up-to-date amenity spaces, upgrading M&E and cosmetic modernisation whilst improving sustainability towards “net zero”.

BWP REIT offers professional investors the potential for capital growth from its asset management strategy and thereafter a steady income from a high quality and energy efficient building, providing tenants with flexible and affordable office space and a strong amenity offer.

Edmund Craston, Chairman of BWP REIT, commented: “BWP REIT presents a compelling opportunity to create value in an asset that has historically suffered from a lack of investment by undertaking a number of essential and cosmetic asset management initiatives.

Our aim is to execute a programme of works to create a high quality, fully repositioned and energy efficient office space with a strong amenity offer which generates long term secure income from a range of high-quality tenants. Leeds is one of the UK’s main regional cities and suffers from an acute shortage of high quality modern and sustainable office stock, presenting strong fundamentals to underpin the investment opportunity BWP REIT presents.”

Richard Croft, Executive Chairman of M7, added: “The transaction and the proposed Admission of BWP REIT to IPSX Wholesale serves to demonstrate how, in addition to being a market for investors seeking long term real estate backed income, IPSX has the potential to solve complex situations for existing property owners while presenting new investors with a strong opportunity to benefit from value creation through the ownership of shares traded on a regulated and liquid exchange.

In this case there has been insufficient capital to invest in Bridgewater Place for a number of years, meaning that the essential works and cosmetic improvements required to make the Property both attractive to office occupiers and investable for yield hungry institutions have not been undertaken. This proposed capital raise and Admission, will allow us to fully reposition this high-profile property to create a grade A office asset which meets the needs of the modern and future occupier.”