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M7 Multi-Let REIT plans London IPO to raise up to £300M

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According to Market Intelligence, December 2022

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M7 Multi-Let REIT plans London IPO to raise up to £300M

M7 Multi-Let REIT plc is looking to raise up to £300 million via an initial public offering on the main market of the London Stock Exchange, with the intention of becoming a real estate investment trust.

The company will offer ordinary shares at 100 pence per share, and the offering is conditional upon raising minimum net proceeds of £147 million. M7 Real Estate, the company's asset manager, announced in August that it was mulling a £300 million IPO of its property portfolio in London.

The admission of shares is expected to take place Nov. 13.

Meanwhile, the asset manager, its directors and affiliates plan to subscribe for a total of 7,280,000 ordinary shares, or 2.42% of the issue, if the offering is fully subscribed for 300 million ordinary shares, subject to a lock-in period of 12 months or 24 months.

M7 Multi-Let REIT intends to purchase regional light-industrial assets and regional office assets across the U.K., while also aiming for a quarterly dividend yield equivalent to roughly 6.5% yearly based on the issue price once fully invested, and a total shareholder return of at least 10% each year, according to a filing.

The company agreed to initially acquire two portfolios in the U.K. containing a total of 93 properties for £119.8 million, subject to the completion of the listing. The assets, 81% of which are light-industrial units and 15% multi-let offices, generate approximately £10.8 million in annual contracted rent as at Sept. 30, reflecting a net initial yield of 8.64%.

M7 Real Estate Financial Services Ltd., the investment manager to the company, has identified an investment pipeline comprising more than 100 target assets, with an estimated value in excess of £400 million.

Akur Ltd. is the financial adviser and Barclays Bank PLC is the sponsor, global coordinator and book runner for the issue. Barclays, along with Scott Harris UK Ltd., is also acting as an intermediaries offer adviser.