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(Alliance News) - A company composed of a single building in Birmingham started share trading on Friday, becoming the first to do so on the International Property Securities Exchange.
Mailbox REIT PLC listed on the London-based IPSX Wholesale market, which bills itself as the world's first regulated investment exchange for commercial property. Mailbox REIT is a single-asset real estate investment trust that owns the Mailbox, a 698,000-square-foot building of mostly office space on a waterside site near Birmingham New Street Station.
IWG PLC, the FTSE 250-listed provider of flexible office space, rents space in the building and took part in the IPO.
Mailbox REIT raised GBP25.9 million from the sale of 25.9 million shares at GBP1 each. This represents 30.5% of the company's shares, with M7 Real Estate Ltd retaining the rest.
This gives Mailbox REIT a total valuation of GBP84.8 million. The building itself is valued at GBP181 million, but has GBP119.7 million in debt secured against it, according to a company spokesperson.
WH Ireland Ltd acted as adviser for the IPO.
The Mailbox generates GBP8.8 million per year in passing rent but has an estimated rental value of GBP15.1 million assuming full occupancy. It currently has 39 tenants with a weighted average unexpired lease term of just over 14 years to break. Rent collection for the quarters that started in January and April stands at 75.5% and 77.3%, respectively.
Level one of the Mailbox currently is being converted from retail into flexible office space, which will be operated by IWG.
Mailbox REIT is targeting an initial yield of 7%.
"In becoming the first company to be admitted to and have its shares traded on IPSX, Mailbox REIT has carved out a unique place in the history of real estate capital markets investment," said Chair Stephen Barter, adding that "Birmingham is set to benefit from positive structural trends, including continued decentralisation," as the UK emerges from the virus pandemic.
By Tom Waite; thomaslwaite@alliancenews.com
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