Birmingham’s boutique Mailbox shopping centre is planning to raise up to £62.5 million via a float on a new stock exchange which will see retail space converted into offices.
The newly formed Mailbox REIT will run an initial public offering (IPO) on the International Property Securities Exchange (IPSX) later this month.
London-based IPSX is the world’s first such exchange dedicated to the IPOs and market trading of companies owning single, institutional-grade real estate assets.
Mailbox REIT is set to become the first company admitted to the exchange when it begins trading shares on October 21 after the move was first mooted in January.
It said it was targeting an initial five per cent per annum dividend yield paid quarterly, starting in Q1 2021.
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Approximately £50 million of the proceeds from the float will be used to reduce the debt while £5.2 million will be invested in the conversion of retail space on level one to approximately 50,000 sq ft of new offices.
This conversion is expected to generate more than £1 million in additional rent annually.
The complex has around 698,000 sq ft of space on the 4.8-acre canalside site and was valued at £179 million.
Tenants at the Mailbox include Malmaison hotel, BBC, Harvey Nichols, Castle Art gallery and Ribble Cycles among many others.
Mailbox REIT will be chaired by Stephen Barter who has more than 40 years of experience in real estate, including senior roles with KPMG and Grosvenor, the Duke of Westminster’s private international property company.
He said: “Mailbox REIT provides investors with the first ever opportunity to invest in a single asset REIT listed on the new IPSX.
“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.”
David Delaney, group chief executive of 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.
“The intention to float Mailbox REIT is a huge vote of confidence in the exchange and of our ability to reach new investors.
“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.”
M7 Real Estate, which acquired the Mailbox last December, will act as alternative investment fund manager to the company and retain a 46 per cent ownership post-float.