First real estate float on challenger stock market Aquis
A Yorkshire retail centre will become the first real estate asset to float on Aquis, London’s challenger stock exchange, with the firm to issue more than £25m in shares, CityAM can reveal.
Scotch Corner Designer Village will launch its IPO in April, becoming the first listing as part of Aram, Aquis’ real estate division.
The Aquis Real Asset Market (Aram) is a segment of the challenger exchange launched to democratise retail investments which are usually only accessible to private equity investors, and is backed by Australian rugby world cup winner-turned Square Mile businessman Michael Lynagh.
The retail village spans more than 180,000 sq foot and is set to open in autumn next year, following a number of significant delays which provoked frustration among residents.
Calvin Klein, Hugo Boss and Tommy Hilfiger are among the retail outlets who have bought pre lets at the site, joined by restaurant chains Wagamama, Pizza Express and Five Guys.
Oberon Capital and Retail Book have been appointed to bookrun the IPO, which is expected to raise £25.5m of new capital.
Development land and business will also be contributed to Scotch Corner in exchange for a further £16.5m of shares.
Scotch Corner expects to make £9.9m in gross income in the first year of operation, climbing to £17m by its fifth year.
Around 29 million vehicles pass the junction between the A1M and the A66 each year, where Scotch Corner is located, with as many as 4.5 million residents living within an hour’s drive of the site, developers said.
Property investment ‘for mums and dads’
Simon Waterfield, the chief executive of Scotch Corner, told CityAM floating retail properties on Aram is “the way forward for property investment”.
He said: “We expect to be the first company to IPO on the newly launched Aquis Real Asset Market, creating an important new corporate finance template that allows SME developers such as us to access capital, while allowing retail investors direct access to projects and the associated returns that are usually reserved for private equity type professional investors and developers.”
Michael Lynagh, who won the Rugby World cup with Australia in 1991 and is a director at Aram Advisors, said real estate assets often “get lost” on the London Stock Exchange and wind up trading at discounts.
He told CityAM: “This is putting large property investment into the reach of mums and dads, and all retail investors. If they want to buy a piece of their local supermarket, they can.
“If they want to buy a piece of Scotch Corner, where they go shopping, they can.”
Lynagh said Scotch Corner is the first of many property assets ready to be floated on Aquis.