Could a new stock market definitely shake up real estate investment?


have you ever wanted to own a share in your favorite building?

When the International Property Exchange launches in May, that may well become possible.

IPSX is the brainchild of David Delaney, 56, a former banker who worked at Barclays for six years and at Credit Suisse for 20 years as a fixed income specialist.

It plans to list individual buildings in which investors can buy shares, starting with The Mailbox in Birmingham, an office building that includes the BBC among its 46 tenants.

The owners will lift £ 25million off the float, valuing the building at £ 180million.

You need to invest at least £ 1000 which you can do through most recognized brokers including The Share Center, WH Ireland and Peel Hunt.

Until now, investors wishing to invest in commercial real estate would perhaps buy shares of British Land or a Real Estate Investment Trust.

IPSX allows you to build a portfolio of real estate investments, buildings that you can see and even maybe visit. The deal pipeline – Delaney refuses to be specific at this time – includes 38 properties, including some in the city and a few sports stadiums.

For investors worried about low interest rates eating away at savings as inflation rises, real estate has always had an appeal. The mailbox has a bulky yield of 7%, which makes it somewhat risky.

Delaney, interviewed below, says it’s for people with a “medium risk” profile and a balanced investment portfolio.

With typical div payers like oil majors and banks in the doldrums – at least for revenue – IPSX could attract interest, he believes.

Who is the typical customer?

Anyone interested in commercial real estate investing. Listed companies have a minimum value of £ 50million so this is a very different exposure than your home / residential property. This opens up the generally closed world of commercial real estate investing.

Is this part of London reinventing itself after the pandemic and after Brexit?

IPSX is the kind of exchange that will put the City back in the epicenter of global finance and revive London’s beleaguered financial sector.

So what is the concept of a property exchange?

If we look at the bottom line first, IPSX aims to give investors direct access to a market of just under a trillion pounds that provides income in a portfolio. With the bank rates where they are and investors getting a low return on their cash ISAs, it comes down to opening up the commercial real estate market to a new set of investors with high quality assets who are making a profit. regular income.

So you float individual properties?

Indeed yes. Owners of an asset, whether it is a commercial building with rental income or perhaps even a vacant lot building a hospital or housing with a long-term income stream, form a corporation. holding company and introduce this unique asset on IPSX. Investors buy stocks with the security of knowing they have full transparency and reporting on this unique asset. IPSX is the UK’s latest regulated stock exchange and is expected to transform the way assets are held and the way private investors can invest in this asset class through their retirement, ISA or trading account and reap the benefits. .

There have been problems with real estate funds recently …

Yes, the fund industry is in the FCA spotlight after the gating issues and the Woodford scandal. What we do with IPSX is to reduce the risk inherent in the asset class and offer both transparency for the investor and above all liquidity. We have Peel Hunt and Panmure Gordon as market makers and daily two-way prices available through The Share Center, Jarvis Investment Management and WH Ireland.

And how has the industry reacted. The property is a bit of a boys’ club, right? In fact, it has been really positive. The industry can see that IPSX is a new source of liquidity and funding that they can access and we have brought in the British Property Federation and fully supported them and a whole host of industry luminaries from Mike Slade of Helical Bar. and David Sleath of the Segro listed FTSE100 backs us up.

The ESG investment is huge now – what are you doing with IPSX? Globally, the real estate ecosystem represents around 40% of CO in the world2 emissions and that’s a problem. What we do with IPSX is work with Carbon Intelligence and provide investors with ESG information on every property listed. With this full transparency, they can drive change through exchange. Listed assets will have to respond to environmental concerns or shareholders will vote with their feet.

How does the City of London think differently and act after Brexit? The city is regenerating. It’s always like that. We have seen a small migration of talent in the financial markets, but the City is great at finding new ways to access, create and distribute capital. IPSX is at the forefront of new thinking. We innovate and are determined to see the stock market as a dynamic source of liquidity for asset owners.

What about the now collapsed Football Index?

I do not know!

About William G.

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