Mailbox postpones IPO as asset manager M7 looks to sell business

Mailbox, a newly-launched REIT with M7 acting as asset manager, said on Friday that it is postponing its planned IPO on the new IPSX stock exchange as a result of a potential acquisition of M7 Real Estate by an unnamed global institutional commercial real estate investor.

The firm, which owns the Mailbox,  a large prime office-led mixed use property in Birmingham valued at £179 mln, was planning to raise up to £62.5 mln (before expenses) through the issue of new shares at a price of 100 pence apiece.

‘M7 Real Estate is the current ultimate beneficial owner of the property and, post IPO, would act as both the company’s asset manager in respect of the property and as its AIFM,’ Mailbox said in a statement.
 
While both the Board and M7 Real Estate’s management team remain fully committed to the IPO, and the undisclosed investor is supportive of it, all parties feel it is prudent and fair to prospective shareholders in the company to wait until there is certainty regarding any potential transaction before continuing with an IPO for the company, Mailbox said.
 
A further announcement is expected for January next year.

The Mailbox comprises 698,000 sq ft of space located on a 4.8 acre canal side site in the UK’s second largest city and was the Royal Mail’s former sorting office. The property’s income is diversified across a number of uses including office (47.6% by passing rent), car parking (18.9%), leisure (21.2%), retail (11.4%) and other (1%). It produces a passing rent of £9.3 mln per annum with an Estimated Rental Value of £12.8 mln (assuming full occupancy).

Originally completed in 1970, between 1998 and 2000 the building was converted to a major mixed-use scheme incorporating 144 residential units (not part of the Property) and over the past eight years has benefitted from a major £50 mln programme of refurbishment and improvements before being acquired by the M7 Real Estate.
 
The M7 Group manages over 830 assets comprising 66 million sq ft valued at €5 bn on behalf of real estate investors such as Blackstone, Centerbridge, M&G and HIG Capital.

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