REAL ESTATE - Two IPOs announced last week suggest that AIM, the London Stock Exchange鈥檚 junior bourse, is losing its near-exclusive power to attract global real estate companies.
Kenmore European Industrial Fund announced that it is to list 拢140m shares on the London Stock Exchange.
The Guernsey-registered closed-end investment company will aim the share offer at both institutional and high-net-worth private investors. It chose the main bourse, rather than the junior AIM, because it will give retail investors access to tax-efficient vehicles such as self-invested pension plans (SIPPS).
Kenmore has identified off-market deals as potentially delivering 鈥渁 bit better value鈥� and allowing time for the firm to conduct proper due diligence 鈥� necessary because the firm expects vendors to be private owners rather than commercial developers.
鈥淐ontinental Europe is a less sophisticated market for selling,鈥� said Rob Brooks, managing director of Kenmore Property Group. 鈥淚n the UK, most vendors have a high level of preparation for sale 鈥� the due diligence is done. Europe is a less sophisticated, more immature market. We鈥檙e buying off local people with different pricing aspirations.鈥�
Describing the fund鈥檚 name as a 鈥渕isnomer鈥�, Brook said it would target 鈥渕ulti-tenanted business parks in urban areas, rather than large-scale manufacturing. These places don鈥檛 have office space but they do have some storage and light assembly space.鈥�
He based his positive prognosis for the flotation on the 鈥渟ervice industry type element鈥� of the segment and the fact that target locations such as Paris 鈥渘eed this type of space鈥�.
Meanwhile, ProLogis European Properties (PEPR), the real estate investment fund that owns 11 distribution facilities across Europe, will float this month.
