CLS Holdings has raised £65m from its retail bond offer as the new source of debt finance gains popularity.
The secondary office specialist raised 30% more than its target and closed the offer period for the bond a week earlier than scheduled after strong demand from private investors.
A high level of interest from private investors for the seven-year bond, which pays a fixed interest rate of 5.5% pa, meant the listed company closed the offer on Thursday 30 August.
CLS executive chairman Sten Mortstedt said subscriptions exceeded the initial £50m target by almost 40%.
Chief executive Richard Tice said the firm would invest the proceeds in its £942m portfolio, which includes offices in London, France, Germany and Sweden.
Further mid-sized listed property companies are expected to go down the retail bond route. This week, FTSE 250 listed fund manager and specialist lender Intermediate Capital Group announced it was also launching its second retail bond issue.
It has appointed Canaccord Genuity to arrange the eight-year, 6.5% bond. There is no set fundraising target for the offer.
Intermediate Capital has €12bn (£10bn) under management and owns a 51% stake in UK real estate debt specialist Longbow Real Estate Capital.
CLS was the second listed property firm to tap up private investors for cash following Primary Healthcare Properties’ successful £75m bond launch in July. Harry Hyman’s healthcare REIT also closed its offer early after hitting its fundraising target.
PHP’s £75m, seven-year retail bond pays holders 5.4% pa interest.
