A new real estate securities exchange could help to breathe life into disused Yorkshire buildings, it was claimed today.
London Real Estate Exchange (LREE) plans to launch the world’s first fully regulated securities exchange, dedicated to the admission and trading of companies owning single commercial real estate assets. The proposed exchange will seek authorisation as a Recognised Investment Exchange from the Financial Conduct Authority and, subject to this being achieved, will trade as IPSX - the International Property Securities Exchange.
Anthony Gahan, the chairman of LREE, said the new exchange would be good news for developers in Yorkshire and around the UK.
He said: “The whole Yorkshire market is fast growing and dynamic, and we are looking at providing an alternative means for Yorkshire real estate owners to either release capital from existing property, or finance activities such as the regeneration of old buildings.”
Mr Gahan, who is a partner at Wyvern Partners, said that the value of the asset would need to exceed around £25m to maximise the benefits of the exchange. IPSX plans to launch commercially in mid-2016.
A spokesman for LREE said: “IPSX seeks to provide institutional and private investors, irrespective of size of investment, with a proxy for direct ownership of commercial real estate in a regulated environment with full transparency and liquidity.
“Investors will be able to buy and sell shares in companies owning single commercial real estate assets admitted to IPSX in the same way and at a comparable cost to shares in companies traded on existing equity stock exchanges.”
LREE was established by Mr Gahan, Cyril Théret and Ian Axe and has been financed privately. The non-executive directors include Sly Bailey, the former CEO of Trinity Mirror.
The aggregate value of the global institutional commercial real estate market is estimated to be in excess of $30 trillion, the announcement said.
The statement added: “In the UK three per cent of institutional assets under management are allocated to real estate. Retail investor direct exposure to commercial real estate is negligible.”
An admission on IPSX will provide owners with the flexibility to retain a majority economic share in a company owning the commercial real estate asset.
The LREE spokesman added: “The flexibility to sell a minority share in a company admitted to IPSX has already generated interest from commercial real estate owners, including owner occupiers with strategically important real estate assets held on balance sheet, which could offer a release of cash to the core business and improve return on capital.”