M7 Real Estate has pulled its proposed IPO and instead opted to bring the designated seed portfolio on to its own balance sheet.
The €5bn fund manager decided to take the decision on M7 Multi-Let REIT despite having close to enough commitments to consider pushing ahead with the listing, which was targeting a maximum fund raising of £300m and a minimum of £150m.
The initial portfolio for the IPO had been valued at £119.9m and totalled 93 assets. Predominantly made up of light industrial assets, 81% by income, it reflected a yield of 8.64%. The assets were being bought from two M7 managed vehicles – Marble, which M7 managed for Goldman Sachs, that is selling £108.9m of the assets and M7 REIP II, which has been managed for a club of investors that is selling £11m of assets.
Richard Croft, chief executive of M7 Real Estate, said: “Throughout the IPO process we received positive feedback and a strong level of investment indications from prospective investors. However, a number of investors expressed an interest in acquiring the initial portfolio privately.
“This, combined with the current market conditions and the volume of recent issuances focusing on UK real estate, led the board to conclude that the initial portfolio and pipeline would be better funded privately over the near to medium term. We are grateful for the support and commitment of the investor community and may revisit a potential listing over the coming 12 months.”
Earlier this morning, M7 announced it had closed its largest ever fund – M7 EREIP IV – with commitments of €400m and firepower of €800m targeting value-add assets in Germany, the Netherlands, France and Scandinavia.
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