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M7 Multi-Let REIT plans £300m float

By Kasmira Jefford - Tuesday, October 10, 2017 9:16

M7 has announced plans to raise £300m via a float on the London Stock Exchange of a new vehicle targeting smaller multi-let regional offices and light industrial assets across the UK.

The UK's regional warehouse and office market has continue to be much in favour, driven by limited supply and strong occupational demand from smaller to medium sized businesses in search of space at reasonable rents. 

In addition high yields for such stock alongside the continued low cost of financing means attractive total returns are being generated for investors.

The new vehicle, M7 Multi-Let REIT has already conditionally agreed to acquire two portfolios of 93 buildings, known as Marble and REIP II, for £119.8m, generating around £10.8m of rent representing a net initial yield of 8.64%.

M7 said it has identified has identified a pipeline of more than £400m assets to buy, comprising more than 100 individual regional light industrial and regional office assets.

It aims to spend the remaining proceeds from the IPO within the first nine months of its admission to the main market. 

Stephen Smith, chairman of M7 Multi-Let REIT and former chief investment officer at British Land, said: "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," he added.

Akur is acting as financial adviser and 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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