Logistics investor and asset manager M7 Real Estate has announced plans to list a portfolio of seven UK warehouse assets valued at £228.9 mln (€259 mln) on the wholesale segment of the International Property Securities Exchange (IPSX).
To this end, M7 has set up a new, closed-ended investment company, M7 Box+ REIT, whose shares will be traded on IPSX.
Upon admission, M7 Real Estate Financial Services will serve as alternative investment fund manager to the listed company, while M7 Real Estate will act as asset manager for the property portfolio.
M7 will directly own around 4.69% of the company’s share capital after listing. Trading is expected to start during April.
The move is aimed at providing shareholders with a sustainable level of income together with the potential for income and capital growth.
Richard Croft, outgoing executive chairman of M7, said: ‘The proposed admission of M7 Box+ REIT to IPSX Wholesale further emphasises the platform’s ability to act as a capital markets alternative for property owners, being the fourth company to list on the exchange in two years. In this case IPSX has allowed investors in a Jersey-based fund to onshore their investment into a new vehicle that benefits from the UK government’s tax-efficient REIT regime with shares traded on a regulated and liquid exchange.’
Robert Gilchrist, co-founder and former CEO of Rockspring Property Investment Managers, has been appointed non-executive chairman of the company.
M7 Box+ REIT plans to grow by investing in a geographically diversified portfolio of ‘e-warehouse’ properties, defined by the company as a warehouse with 'enhanced' planning uses, whereby its function can be changed over time. These are typically large regular shaped industrial units with retail frontages that could easily be converted to pure industrial use and are typically located with good accessibility and sufficient car parking that could be used for yard space in the event of conversion.
Said Croft: ‘We believe that the historic lack of distinction between generic retail assets and retail warehouses has led to mispricing for these properties which are supported by strong market fundamentals.
‘Despite Covid-19 and the current economic headwinds, well-located e-warehouses have demonstrated a consistent level of rental growth in recent years due to robust occupier demand, driven by continued e-commerce penetration and an increased focus from businesses on their supply chain. As such, we have identified an opportunity in this subsector, which offers substantial scalability potential in the UK, supporting our aim to provide shareholders with a sustainable level of income together with the potential for income and capital growth.’