One of London’s best-known property funds is planning to raise £100m by floating a new feeder company.
Plans for the initial public offering of a company called the West End of London Property Investment Company (WELPIC) were announced today.
It is looking to raise £100m by floating on AIM, for investment in the West End of London Property Unit Trust, which is managed by Schroders and Grafton Advisers. Grafton is part of Quintain Estates and Developments.
Its success will be carefully watched as a signal of the prospect for property companies raising money in the public markets – of the four property company IPOs launched in London last year only one, a listed debt fund managed by Starwood Capital, succeeded.
WELPIC will only invest in units in the WELPUT fund, which has a portfolio of £873m of assets in the West End and Midtown. It said it would look to grow in size to up to £250m over the next 18-24 months.
William Hill, head of property at Schroder Property Investment Management, investment adviser to WELPIC, said:
“WELPIC provides investors with a listed and tradable security that gives direct exposure to an established portfolio of West End and Mid-Town London assets. By acquiring existing units, there is no cash drag and no associated investment costs of acquiring property, making it a very efficient route for investors to gain exposure to the market. Furthermore, the planned growth of WELPIC provides a long term source of capital for the growth of the portfolio and optionality for existing WELPUT holders to switch into WELPIC.”
Nigel Kempner, head of Grafton Advisors, property adviser to WELPUT, said:
“The West End and Midtown office markets are experiencing a shortage in available supply of new space with an increasing amount of demand. This environment normally leads to rental growth, which we anticipate will be strong over the next two years at least, whilst also generating continued interest from international investors, leading to strengthening capital values. Our portfolio is well positioned to take advantage of these market conditions and we believe that WELPIC will provide investors with a unique opportunity to participate in this growth.”