IPSX Prime is the core spot equity market for IPSX which is open for the admission to trading of companies owning underlying single commercial property assets or multiple commercial property assets with a high degree of commonality (the ‘underlying property assets’) which are, or are proposed to be, securitised and traded 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 Prime enables issuers to bring to market an Initial Public Offering (IPO) of shares in companies which own underlying property assets, reaching new sources of capital in a regulated market.
Owners of real estate are usually faced with a limited set of choices - keep the asset, sell the asset entirely or enter into a potentially complex Joint Venture agreement with a new partner. IPSX provides issuers with significantly more choice and flexibility. An issuer can retain economic ownership of the underlying asset by retaining anything from 0% - 75% of the shares in the company admitted to trading on IPSX Prime (subject to satisfying minimum free float rules).
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).
In order to be admitted to IPSX Prime, each company (or prospective issuer) will need to comply with the following:
- Appoint an IPSX Lead Adviser to support and manage the IPO process
- Sell down a minimum 25% of the underlying company’s shares at the point of admission
- Appoint an IPSX Approved Valuer to produce and initial valuation of the property asset(s) and six-monthly valuations thereafter
- Appoint an IPSX Market Maker
- Limit the leverage in the listed entity to 40%
- Have audited accounts
- Meet IPSX’s Admission and Disclosure Standards
- Issue a prospectus for approval by the Financial Conduct Authority
Ownership of commercial real estate through IPSX is open to the widest range of investors and IPSX offers a new venue for investors to trade shares. Retail investors can access what is effectively a new asset class benefitting from a much lower cost base compared to buying real estate directly. Family offices have a clear preference for direct property ownership and will benefit from the direct investment opportunity that IPSX provides to access high yields from stable assets. Institutional investors will value the opportunity to invest in new assets that have never previously been available on the capital markets.