How to IPO Commercial Real Estate on IPSX - Part 1

March 28, 2023


An initial public offering (IPO) in any sector is a process that requires careful preparation. The planning, to ensure both a successful IPO and a positive start as a newly public company, begin well in advance.

IPSX, the only regulated stock exchange dedicated to trading commercial real estate, has created a Practitioners Guide to commercial real estate IPOs, to demystify the process and illustrate the opportunities and obligations for potential Issuers.

This is the first of two blogs outlining each important step in a commercial real estate IPO admission process.

An IPO on IPSX, takes place when a company offers to sell its own, new or existing, shares to investors through the stock exchange. This can be of interest to both existing shareholders, who may wish to sell the shares they have previously bought privately, as well as to new investors, who may wish to purchase shares previously unavailable. There are several reasons why owners of a real estate company – and real estate assets – would seek admission to trading on a Recognised Investment Exchange. For example:

  • Company wants to gain access to new capital - by selling a percentage of the equity to pay for building upgrades, execute their strategic goals, pay down debt or for owners and other shareholders to realise capital value
  • Create a new market for the company’s shares - allowing shares to be openly traded gives the company access to the broadest pool of potential investors
  • Raise the company’s profile and brand through greater press and analyst coverage
  • Enhance the company’s status with customers and suppliers - who may be reassured by the regulatory oversight involved with a company whose shares are traded on a Recognised Investment Exchange

Before these benefits can be realised, the owners must understand the process and the steps involved. From the outset, companies must be deemed ‘appropriate for admission’. The process of seeking an IPO requires commitment from the directors of the business.

Appointing a team of advisers

Any company wishing to seek admission to trading on a Recognised Investment Exchange begins by appointing a team of advisers to facilitate the IPO process. This team will usually include a Lead Adviser, broker, reporting accountant, lawyer, valuer and financial PR. Clear purpose and role definition should be established early to avoid inefficiencies in the process.

The role of the Lead Adviser

The Lead Adviser’s primary role is to prepare the company, which owns the assets, for admission.  They will also manage the IPO process by ensuring the lawyers, brokers, accountants, valuers and PR advisers all execute their roles as required. The Lead Adviser has a key role as project manager and advises on all aspects of the process including the preparation of the prospectus or admission document. They also have to sign an application form confirming that the company is suitable and has complied with IPSX rules. The Lead Adviser needs to be either an FCA Authorised Person or a member of a designated professional body (FCA Handbook, section 326).

The role of the broker

A broker will advise the company on all shareholder and investor related aspects of the IPO process and will help to gauge the demand for shares being issued or sold. Their main responsibility is to advise the company on its relationship with the investor community. The broker can also be the Lead Adviser.

Legal, accounting and due diligence

The company’s legal advisers will perform a number of workstreams as part of the admission process. These include advice on tax and corporate structuring, property due diligence and preparation and verification of the prospectus and other public documents. They will also provide legal opinions.

The company will also need to appoint a reporting accountant to report on the company’s financial record and carry out financial due diligence. Audited historical financial information on the company covering the last three years (or such shorter period that the company has been in operation) is required for inclusion in the company’s prospectus ahead of IPO.


Valuation for an IPSX IPO

Where a company is listed on IPSX, an Approved Valuer will issue a report prepared according to the standards and guidelines of the Royal Institution of Chartered Surveyors’ (RICS) Red Book. This report will include a detailed SWOT analysis of the asset, its covenant strength (i.e. tenants), its location and local market conditions, as well as an assessment of comparable properties.

Communicating with investors

Companies, with their broker and lead adviser, looking to access the public markets will develop and articulate a strong equity story that clearly explains why investors should believe in the company, its management and its future prospects.

Ongoing activity following admission to IPSX

Following the company’s admission to trading on IPSX, the broker is generally responsible for preparing update reports for distribution within the investor community, based on the company’s announcements. This may also include commentary on other companies or property sales taking place in the sector.

A successful IPO

After a successful IPO, the hard work really begins. An effective financial communications and investor relations strategy, which targets investors, analysts and the media, as well as wider stakeholders, is crucial. This should include preparations for conferences and analyst meetings, financial calendar events and general corporate positioning. A well organised infrastructure in place will ensure your company’s management is engaging with the market effectively and can help create supportive conditions to underpin the company’s share price over the longer term.

IPSX is the world’s first, regulated real estate stock exchange. It provides a robust and proven market for issuers seeking to raise capital and is regulated by the Financial Conduct Authority.

Find out more about the IPO process for commercial real estate in Part 2.



International Property Securities Exchange is the trading name of IPSX UK Limited. IPSX UK Limited is a company registered in England and Wales with Company Number 10519448, whose registered address is 20 Birchin Lane, London, EC3V 9DU.

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