M7 Multi-Let REIT is seeking to raise £300m for a float on the London Stock Exchange.
The company is to offer 300m shares at 100p for a float on the main market. The issue is conditional on a minimum of £147m being raised.
The UK-focused vehicle will focus on regional multi-let light industrial and offices with a target dividend of 6.5% and 10% total shareholder returns.
The group, which will seek REIT status, has agreed to acquire, conditional upon admission, 93 assets across two UK portfolios, known as Marble and REIP II, for £119.9m – a net initial yield of 8.64%.
The initial portfolio is divided between regional light industrial (81%), and regional multi-let office (15%).
The group has also identified a pipeline of assets and portfolios with an estimated value of more than £400m, comprising more than 100 individual regional light industrial and regional office assets.
The group’s board comprises Steven Smith (ex-British Land and AXA Real Estate) as chairman and Rob Bould (former Bilfinger GVA chief executive), Peter Denton (formerly Group Finance Director at Hyde Group) and Gerald Parkes (a founding partner of Property Capital Partners Europe (formerly Pacific Real Estate Capital Partners).
Smith said: “M7 Multi-Let REIT allows investors the opportunity to benefit from stable income streams which the UK multi-let sector offers, as well as the potential for enhanced returns that can be achieved through the active asset management initiatives that M7 has a strong track record of delivering.
“The UK private sector is dominated by SMEs, which have consistently demonstrated more stable growth than large businesses, and UK multi-let regional real estate assets play a critical part in facilitating that growth. At the same time, the sector is often overlooked by investors, being considered by some as inefficient due to the small individual lot sizes and/or because of the requirement for active and intensive management. This provides what we believe is a compelling opportunity to acquire real estate at attractive yields, with value-add potential and often at below replacement cost.”
M7 Real Estate Financial Services, a wholly owned subsidiary of M7 Real Estate, will act as AIFM and investment manager to the group. M7 Real Estate will act as asset manager to the group.
Akur is acting as financial adviser. Barclays Bank is acting as sponsor, global co-ordinator and bookrunner in relation to the issue. Barclays and Scott Harris UK are acting as intermediaries offer advisers.
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