Mailbox owner to raise more than £60m

A newly formed company which owns the Mailbox in Birmingham has announced plans to raise up to £62.5m.

Mailbox REIT plc, the single asset business which owns the city centre property, valued at £179m, is seeking to raise the funds by way of a placing, offer for subscription and intermediaries offer of ordinary shares in the capital of the company at an issue price of 100 pence per share. 

The business will apply for the ordinary shares be admitted to trading on the IPSX Prime segment of International Property Securities Exchange.

IPSX is a new investment exchange regulated by the FCA. The board expects the company will be the first single asset REIT to have its ordinary shares admitted to trading on IPSX.

M7 Real Estate Financial Services 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.

M7 Real Estate will also retain indirect ownership of approximately 46 per cent of the company’s share capital after admission.

WH Ireland Ltd is acting as IPSX lead adviser and joint bookrunner while Panmure Gordon (UK) Ltd is acting as joint bookrunner.

The Mailbox comprises approximately 698,000 sw ft of space located on a 4.8-acre canal side site was the Royal Mail’s former sorting office.

Stephen Barter, chairman of Mailbox REIT, said: “Mailbox REIT provides investors with the first ever opportunity to invest in a single asset REIT listed on the new IPSX, an FCA regulated exchange.

“Through Mailbox REIT investors will be able to gain exposure via liquid tradeable shares to a significant landmark office-led mixed use asset in the UK’s largest regional city and economy which, without IPSX, would otherwise only be accessible to institutional investors. 

“Mailbox REIT offers an attractive dividend underpinned by the long dated income streams derived primarily from globally recognised, high-profile and low risk tenants as well as the anticipated income and valuation enhancement resulting from planned asset management initiatives.

“Furthermore, there is a clear demand and supply imbalance for prime Birmingham offices which we believe will only become more acute as a result of continued decentralisation and improved connectivity from HS2.”

Richard Croft, executive chairman of M7 Real Estate, added: “After almost a decade of record low interest rates and no sign of any change to that status quo, we have an environment where investor appetite for asset backed investments underpinned by high quality income is arguably stronger than ever before.

“We are therefore firm believers in IPSX’s potential to help alleviate that demand, while at the same time transforming and democratising real estate investment, by making prime landmark assets such as the Mailbox available to all types of investors, large and small, through liquid shares that are tradeable on a new regulated stock exchange.

“I believe Mailbox REIT is a compelling opportunity to invest in a prime regional office led property at an attractive entry point relative to historic valuations.

“We are absolutely confident that the office will remain integral to working life and intend to retain a significant stake in the property to both align our interests with new shareholders and allow us to continue to benefit from the Mailbox’s mix of high quality income and value enhancement potential.

“We are looking forward to utilising our strong track record of providing superior returns to some of the world’s largest real estate investors to deliver value for Mailbox REIT shareholders.”

David Delaney, group chief executive, IPSX, added: “This is a watershed moment in the history of IPSX, which has the capacity to be a great success story in UK innovation.

“Many years of hard work have been undertaken to get the exchange to this stage. To have launched our first IPO in this extraordinary year not only reflects the strength of real estate as an investment class, but also the compelling proposition that IPSX represents as a platform allowing all investors to access and selectively own shares in companies owning single commercial property assets in a liquid and regulated way.

“We have a strong pipeline of further IPOs and we are eagerly anticipating their introduction to the market.”