M7 Real Estate has hired Barclays Bank and capital markets advisory firm Akur Capital to prepare a £300 million ($391.6 million; €331.6 million) floatation of one of its property vehicles on the London Stock Exchange.
The London-based real estate investment manager has not disclosed which specific fund would be taken public but, according to media reports, it is understood to be one of its logistics platforms.
M7 is thought to be seeking the IPO in order to raise capital for further investment in UK logistics assets. The firm will reportedly seed the listed vehicle with a portfolio comprised mainly of logistics assets, as well as a selection of office properties.
Although a precise timeline for M7’s IPO is not yet been revealed, it has been reported that the floatation would take place later this year. If successful, it would be the largest UK real estate listing of 2017 and one of the largest of any kind in the UK this year.
Demand in the UK logistics sector is high at present, having been driven in recent years by the rapid growth of online retail. But this thirst for the sector has pushed down supply to record lows.
The availability of Grade A UK-based logistics space dropped by 23 percent in the fourth quarter of 2016 and by 3.3 percent in the first quarter of this year, according to property services firm Cushman & Wakefield.
Some of the most notable deals involving UK logistics over the last two years include Oxenwood’s £268 million April purchase of a 3.9 million square foot portfolio in England and Wales; Blackstone and Delin Capital’s purchase of a €250 million, 2.4 million square foot portfolio, spread across the UK; Prologis and CBRE GIP’s £1 billion joint purchase of a 7.6 million square foot; and CPPIB’s £1 billion three-hander with APG and Goodman to buy assets in London and Birmingham.
Further afield in Europe, investor appetite for logistics real estate is also high with some of the region’s biggest deals over the last 12 months featuring the sector. For example, in June, Chinese sovereign wealth fund CIC acquired Blackstone’s European logistics business, Logicor, for €12.25 billion after abandoning initial plans to seek a public listing. While in October last year, P3 Logistic Parks was sold by TPG and Ivanhoé Cambridge to Singaporean sovereign wealth fund GIC in a deal which valued the platform at €2.4 billion.
M7 was founded in 2009 and originally targeted the multi-let industrial sector in the UK. It now manages over 800 retail, office and industrial properties across Europe with a value of around €4.1 billion. Nonetheless, some of its largest outlays have been in the logistics sector. The firm has completed deals with some of private equity real estate’s biggest names over the last few years. In 2014, the firm partnered with Starwood Capital, to invest £100 million in UK logistics and office assets, and Oaktree Capital Management, to buy around £500 million of European logistics properties. While earlier this year, the London-based investment manager joined forces with Blackstone to acquire a Dutch and German logistics portfolio for €1.28 billion.
M7 was contacted for comment on the IPO but was unavailable.