IPSX Prime enables prospective issuers to bring to market an Initial Public Offering (IPO) of shares in companies which own underlying property assets. For example, a commercial office block that occupies a single geographic location or postal address; or comprises a single building or a group of co-located buildings.
IPSX expects that an underlying property asset should be of institutional grade (i.e. each property will generally have a Market Value in excess of £50m).
To be admitted to IPSX Prime, the Issuer must appoint an IPSX Lead Adviser and sell down a minimum 25% of the company’s shares at the point of admission. The Issuer must appoint an IPSX Approved Valuer, limit the leverage in the entity to 40%, issue prepare and submit a prospectus and other information to the UK Listing Authority (UKLA), have audited accounts and meet the IPSX Admission and Disclosure Standards.
- Appoint IPSX lead advisers to support and manage the IPO process
- Minimum market capitalisation of at least £25m
- Appoint an IPSX Lead Adviser to manage the IPO process
- Appoint an IPSX Approved Valuer
- Have audited accounts
- Sell down a minimum 25% of the company’s shares at the point of admission
- Leverage limit in the entity of 40%
- Issue an approved prospectus for approval by the UKLA including a valuation report
- Application of corporate governance code
- Meet the IPSX Admission and Disclosure Standards
A property asset owner may decide to release capital from a property they own. Instead of
selling the property in its entirety and losing any economic interest, they may choose instead
to sell the property to a newly formed company, which has been established for the sole purpose
of managing the asset. The economic returns of the company are then shared through securitisation
of the company and the sale of its shares and, in exchange for the sale of the property asset,
the original asset owner may receive cash and some shares in the company.
The company structure will determine the tax efficiency of the arrangement:
- If the company’s legal structure is a Special Purpose Vehicle (SPV), the transfer of the property asset will not trigger Stamp Duty Land Tax (SDLT);
- If the company is not an SPV, the transfer of the property asset triggers 100% SDLT (as with a private treaty transaction);
- If the company also seeks to take advantage of the UK REITs regime (providing tax efficient treatment of property rental income and capital gains), it will also need to have its shares admitted to the Official List and/or admitted to trading on a recognised stock exchange.
To find out more about becoming a member of the Exchange, click here to download the application forms