British Land has bought a minority stake in new property stock exchange IPSX.
The UK’s second-largest property company may use the platform to sell shares in large, individual assets to retail investors.
The stake is understood to be less than 5% in exchange for a “modest sum”.
Jonathan Rae, head of investor relations at British Land, said: “Anything that improves liquidity and provides us with another option when selling down assets is positive.”
British Land has not yet selected any individual assets or stakes but its largest individual holdings are its 50% in Broadgate, EC2, and Meadowhall shopping centre in Sheffield.
IPSX aims to provide retail investors with the opportunity to gain exposure to single, recognisable assets rather than shares in a more complex company holding a portfolio of assets.
Rob Bould, former chief executive of GVA Bilfinger and non-executive director at IPSX, said: “Providing clarity and income in this low-yield environment is very enticing.
He added: “Investors will also determine what yields and values are and this will provide real-time comparables for the market.”
The directors and investors of the new exchange predict that as a result of investment from the man on the street, the prices that assets listed on the exchange will achieve will be better than those achieved in the open market, where the number of buyers for such large assets is generally limited to a handful.
IPSX is also in discussions with pension fund and private equity real estate investors to take strategic stakes in the business as they also look to use it to exit investments.
Discussions have also taken place with the public sector, which may look to release equity from the £350bn government estate by listing a stake in its holdings in a transparent way by using the new exchange.
IPSX facts
- IPSX is a stock exchange for companies that own single commercial real estate assets that is due to launch in Q1 2017
- Primary owners are Wyvern Partners investment banker Anthony Gahan, former chief executive of Plus Markets Cyril Theret, and former chief executive of LCH Clearnet Ian Axe.
- IPSX is a recognised Investment Exchange, regulated by the FCA, similar to the London Metal Exchange
- Minimum asset value is £700,000, “sensible minimum value” is £25m, early IPOs likely to be £50m-£100m with no maximum
- At least 25% of each asset must be listed
- Each property will have its own board and structure
- Shares to be sold through IFAs and stockbrokers
- Most companies listed likely to be set up as REITs
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