Urban Exposure, the residential development finance and asset management company, has proposed to list on AIM on 9 May by selling 150m £1 shares, to raise £150m.
Based on the placing price, the market capitalisation of the company will be £165m on admission, at which point the company will have 165m ordinary shares in issue.
Company management and employees will own around 9% post admission; and the company intends to use the net proceeds of the placing to lend to UK residential SME developers from the company’s balance sheet and seed and expand asset management activities.
Urban Exposure has a current loan book of £700m on 18 projects, is focused on “generally affordable” and “high demand” housing in major cities and towns in England.
In a statement, Urban Exposure said was seeking to align its lending strategy to address the significant shortfall in housing stock and to government initiatives for increasing housing supply.
Chief executive Randeesh Sandhu said: “The UK faces a chronic housing shortage. Only 138,650 homes are currently built each year, far below the government’s 300,000 target.
Additional funding
“Meeting this shortfall will require an estimated £208bn of additional funding over the next 10 years and Urban Exposure is well placed to help meet this demand.”
The company said it would provide investors with exposure both to the residential development lending business through direct lending and to the loan asset management business built by the team.
Since 2010, the Urban Exposure team has arranged loans, with a gross development value of £1.9bn, generating returns of around 21% IRR per annum.
The company said it had “a strong institutional investor network and deep relationships, having arranged loans financed primarily by third parties and co-lenders” and “relationships with high-quality residential developers throughout the UK, consisting of SMEs and larger developers”.
William McKee CBE, chairman of Urban Exposure, said the company was well-placed as both a lender and asset manager of third party funds to “capitalise on the reduction in traditional bank lending to the sector since the global financial crisis.”
AIM admission
Admission and commencement of dealings on AIM in the ordinary shares are expected to take place at 8am on 9 May under the ticker UEX.
Liberum Capital is acting as nominated adviser and broker, and sole bookrunner in relation to admission.
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