Five years, three floats and a wind down: how IPSX tried and failed

The move to wind down IPSX comes after years of struggle to build an innovative new market through which to encourage real estate investment. For all the ambition and talk of billions of pounds of listings, the market now looks set to close with just three achieved during one of the toughest periods for IPOs in recent times. Here, we look back at EG’s coverage of the development of the exchange, including hires, advisory appointments, drawn-out dealmaking and, of course, the image of M7’s Richard Croft climbing a mountain in his underwear. January 2019 After years of preparation and wooing backers including M7, British Land and Henley, the International Property Securities Exchange is given the green light from the Financial Conduct Authority to operate as a recognised investment exchange. Roger Clarke, M7’s head of corporate finance, is seconded as a capital markets senior adviser. The team say the first listings could happen within months. April 2019 JLL becomes the first advisory firm to formally join IPSX as a valuer. July 2019 A new leadership team is put in place. Founder Anthony Gahan steps back as chairman, with David Delaney becoming group chief executive and Clarke named managing director and head of capital markets. November 2019 Clarke tells EG that ongoing Brexit negotiations and a looming General Election mean the first IPSX listings are unlikely to happen until 2020, but that 26 potential deals are being discussed that could be valued at a cumulative £6.5bn. October 2020 Plans are revealed for the first IPSX listing – Mailbox REIT, into which M7 will place the eponymous mixed-use scheme in Birmingham – which aims to raise up to £62.5m. The deal is announced on 1 October with a planned admission date of 21 October. Two weeks later, the timetable is pushed back by two weeks, the REIT saying it received “significant interest from retail investors” and that a delay was needed “in order to deal with this interest”.  Towards the end of October the deal is delayed again – this time by six weeks – as the REIT strikes a deal with IWG to run office space in the Mailbox. That same month, accounts for IPSX Group filed with Companies House state that “the need to raise additional funding… which has not been secured or agreed at the date of approval of these financial statements, represents a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.” December 2020 The Mailbox REIT listing is postponed while M7 enters takeover talks with Oxford Properties. No new date for the IPO is set. March 2021 The Mailbox IPO is relaunched, but this time on IPSX’s wholesale market, targeting institutional rather than retail investors. An admission date of 19 April is set but then extended three times. May 2021 On 14 May, the Mailbox REIT IPO finally completes, more than seven months after first planned and raising £25.8m compared to an original target of £62.5m. M7’s Richard Croft tells EG that sealing the deal is “the greatest achievement of my career”, adding: “I feel like I’ve climbed Everest in my underpants.” September 2021 M7 says it will launch a second listing on IPSX – Regional E-Warehouse REIT, which owns an 18-asset, £120m UK retail warehouse portfolio. The REIT starts trading in December. January 2022 Delaney steps down as chief executive of IPSX Group, replaced by Clarke. May 2022 Accounts for IPSX Group reveal that the company started a £10m fund raise in the summer of 2021, from which it had raised £8.8m at the time of the accounts’ publication. Clarke tells EG: “The reason we are raising what seems like a lot of money is we have great plans to invest in the team, recruit people, increase our marketing presence. Having built the exchange during Covid times, with the complexity of building an electronic exchange… having got all of that working, now we want to put some capacity through and beef up the team.” November 2022 IPSX marks its hat-trick of IPOs with the listing of BWP REIT, set up to hold M7’s Bridgewater Place. The REIT raises £35m from its admission, valuing the building at £63m. March 2023 M7’s Croft kicks off plans to float a warehouse portfolio valued at £228.9m via M7 Box+ REIT. Summer 2023 IPSX hunts for new investment, including options that could see the group or subsidiary recapitalised or bought. While this happens, the company is in regular discussion with the FCA over its levels of regulatory capital. September 2023 IPSX UK, the group subsidiary that operates the exchange, starts an orderly winding up of the company and its markets. It says a “perfect storm of macro headwinds” left it “unable to scale the platform at a rate which would have avoided this scenario”. Clarke tells EG: “The proposition, I am convinced, is still one that the world needs,” adding: “This is an idea that’s time is coming. But we have struggled to meet our business plan.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews