IPSX will operate two markets. IPSX Prime (launched in 2019), admits to trading issuers owning underlying property assets. Our second market, IPSX Wholesale, subject to FCA regulatory approval, will be exclusively for professional investors and has been designed to provide real estate owners with an onshore market that is capable of accepting a variety of different corporate structures within a flexible regulatory environment, including JV REITs.
IPSX Prime enables prospective issuers to bring to market an Initial Public Offering (IPO) of shares in companies which own underlying property assets, which are single commercial real estate assets, or multiple assets with commonality, and are, or are proposed to be, securitised for the purposes of trading on the Exchange. 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 Issuer’s asset(s) will generally have a Market Value in excess of £50m).
To be admitted to IPSX Prime, the Issuer must:
- Have a minimum initial market capitalisation of at least £25m
- Appoint an IPSX Lead Adviser to manage the IPO process
- Appoint an IPSX Approved Valuer
- Appoint an IPSX Market Maker
- Sell down a minimum 25% of the company’s shares at the point of admission
- Observe an initial leverage limit in the entity of 40%
- Prepare a prospectus for approval by the FCA including a valuation report, reference the applicable corporate governance code, and have audited accounts.
IPSX Wholesale will be a MTF, a multilateral trading facility that facilitates the exchange of financial instruments between multiple parties. IPSX Wholesale has been designed for real estate owners holding commercial real estate in structures which may be more complex than the structures employed by issuers which are suitable for admission to IPSX Prime, and therefore be more suited for institutional investors.
The types of issuer could include more complex ownership structures, more complex legal arrangements, different leverage ratios (potentially impacting on returns), more unusual tenancy arrangements or tenancy covenants, and potentially issuers of commercial real estate companies where the assets are under development rather than fully established operating companies, i.e. property companies and investment companies.
These arrangements would all be subject to disclosure where material to investment decisions, and institutional investors would be capable of undertaking the more detailed due diligence required to inform their investment decisions.
Further details will be made available as plans are finalised and subject to regulatory approval.