RNS Number : 5002G
BWP REIT PLC
15 November 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, OR IN OR INTO, THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE SO TO DO WOULD OR MIGHT CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS FOR
THE PURPOSES OF THE UK VERSION OF REGULATION (EU) 2017/1129, WHICH
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 OR AN ADMISSION DOCUMENT AND DOES NOT
CONSTITUTE AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION IN ANY
JURISDICTION, INCLUDING (WITHOUT LIMITATION) THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA. INVESTORS SHOULD NOT
SUBSCRIBE FOR, OR OTHERWISE PURCHASE, ACQUIRE, SELL OR DISPOSE OF,
ANY OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON
THE BASIS OF THE INFORMATION CONTAINED IN THE ADMISSION DOCUMENT
PUBLISHED BY THE COMPANY.
BWP REIT PLC
BWP REIT RAISES GBP35 MILLION AHEAD OF ADMISSION TO IPSX
and
PUBLICATION OF IPSX ADMISSION DOCUMENT
15 November 2022
BWP REIT PLC ("BWP REIT" or the "Company"), a newly formed
single asset company established to acquire Bridgewater Place
("Bridgewater Place" or the "Property"), an office-led mixed use
property situated in a prime location in central Leeds, is pleased
to announce that the Company has raised GBP35,000,000 from the
issue of 35,000,000 new ordinary shares with a nominal value of 10
pence each (the "Ordinary Shares") at an issue price of 100 pence
per share (the "Issue Price"). Completion of the acquisition of the
Property will take place automatically on Admission pursuant to a
completion undertaking.
Application has been made for the entire issued and to be issued
ordinary share capital of the Company to be admitted to trading on
the Wholesale segment of the International Property Securities
Exchange ("IPSX") ("Admission"), with the new Ordinary Shares
representing c. 99.9 per cent. of the issued ordinary share capital
on Admission. Admission is expected to occur and dealings are
expected to commence at 9.00 am on 16 November 2022.
In connection with the application for Admission, the Company
has prepared an admission document (the "Admission Document") which
has been published and will be available today at
www.bwpreit.com
The capital has been raised from a number of institutional and
family office investors. Upon Admission M7 Real Estate Ltd ("M7"
and together with its subsidiaries, the "M7 Group"), either
directly or through its affiliates, will own c.18.4% of the
Company's share capital.
The Ordinary Shares will trade under the ticker 'BWP'. The ISIN
number of the Ordinary Shares is GB00BQ1NFW69 and the SEDOL code is
BQ1NFW6. WH Ireland Limited ("WH Ireland") acted as IPSX Lead
Adviser and Settlement Agent.
On Admission, BWP REIT will become the third company to be
admitted to trading on IPSX. The platform is a FCA Regulated
Investment Exchange and the world's first such exchange dedicated
to single asset real estate companies and those owning multiple
assets with commonality. IPSX Wholesale is reserved for
institutional and qualified professional investors, while the IPSX
Prime segment of the market is open to all investors and aims to
give retail investors the ability to acquire tradable shares in
institutional quality real estate assets.
About Bridgewater Place
Bridgewater Place is a large office, retail, and residential
mixed-use property completed in April 2007 that sits on a
three-acre freehold site in a prime location in central Leeds. At
30 above ground storeys, it was the tallest property in Yorkshire
until 2021. The internal demise of the residential accommodation
was sold under a 250-year lease in 2007 and therefore is not owned
by the Company. The Property has been independently valued as at 30
August 2022 at GBP63 million by Avison Young.
The Property generates an annual contracted rental income of
GBP5.97 million, with a weighted average unexpired lease term
("WAULT") of 3.74 years to break and 3.93 years to expiry.
Approximately 8% of the total floor area is currently vacant (as at
30 August 2022). Assuming 100% occupancy and completion of the
capital expenditure programme referred to below, the Property would
have an independently assessed market rental of GBP7.68 million per
annum. Approximately 77% of the total floor area is occupied by the
Property's three largest tenants, who are classified as either
'very low risk' or 'low risk', with global multinational law firm
Eversheds Sutherland accounting for approximately 48% of the total
floor area.
The Property comprises two separate but inter-connecting
structures either side of a central atrium, with 15,587 sq. ft. of
retail units on the ground and first floors and 234,711 sq. ft. of
commercial office space from floors one to nine. A 20-storey
residential tower of 198 apartments sits above the offices on the
west wing spanning floors 11 to 30, with floor 10 used to house the
mechanical plant. There are two levels of parking offering 268
spaces in the basement and at ground level.
Certain elements of the Property require substantial investment
and this is reflected in the approximately GBP63 million
acquisition price. The funds raised, along with the debt facility
being novated on Acquisition, will be used to fund the acquisition
of the Property. GBP23 million of Loan Notes have also been issued
which will enable the Company to undertake a comprehensive asset
management plan for the Property. Until such works are completed,
the Company does not intend to pay a dividend and will focus
resources on achieving capital growth.
The Property benefits from excellent transport links by
occupying a high-profile position fronting Victoria Road (the main
arterial link between Leeds city centre and the M621 motorway) and
close to Leeds Railway Station.
Use of Funds and Asset management strategy
The GBP35 million raised and the Loan Notes will be used to
carry out a wholesale repositioning of the Property. While the
Company is not responsible for the residential accommodation this
also includes a comprehensive remediation of the entire Property's
cladding, which also benefits the residential occupiers and creates
an up to date, energy efficient building. The costs of the
remediation of the cladding at GBP14.5 million includes a GBP3
million allowance for inflation and the improvements to the
Property are estimated at GBP9 million. Costs of acquisition of the
building, issue expenses and working capital represent the balance
of the funds raised.
The asset management strategy for the Property aims to create a
clear path to capital growth through sustainability improvements
(including a pathway to net zero), increasing space utilisation,
capturing rent reversion and-letting vacant space. A comprehensive
upgrade programme will be carried out in phases over the next two
to three years allowing current occupiers to remain in situ. The
programme aims to significantly improve how the Property is
positioned within the Leeds office market to both occupiers and
ultimately future buyers or long-term investors.
A key element of the asset management strategy will be to lease
c.18,000 sq. ft. of currently vacant space on floor 9 (following
completion of certain works by mid-2023), resulting in an expected
c.GBP0.6 million per annum increase in rental income and reducing
service charge leakage.
M7 believes that with careful branding, marketing and proactive
management, the physical qualities of the Property, its energy
performance credentials, new amenities, inherent affordability
relative to newly constructed buildings together with regional
connectivity, will all serve to position the Property for the next
generation of tenants.
Upon completion of the remedial works and repositioning of the
Property, the Board will seek to optimise shareholder returns
either through an outright sale of the Company or by listing the
Company on the IPSX Prime market if the Directors are advised that
the increased liquidity will provide shareholders with a choice to
exit or retain their investment at an appropriate valuation.
M7 Real Estate Financial Services Ltd will serve as alternative
investment fund manager to the Company and M7 Real Estate Ltd will
act as asset manager in respect of the Property.
Edmund Craston , Chairman of BWP REIT, commented: " The demand
received from investors for BWP REIT signals their belief in the
capital growth potential of Bridgewater Place and their support for
IPSX as a platform through which to invest. Once Admission takes
place the asset manager plans to commence a series of works to
fully reposition the asset and deliver an energy efficient
building, which will aim to capture rent reversion and re-let
vacant space. These asset management initiatives will seek to
generate long term secure income from a range of high calibre
tenants, in one of the UK's largest regional cities benefitting
from strong underlying fundamentals."
Richard Croft, Executive Chairman of M7, added: "The planned
admission of BWP REIT plc to the IPSX Wholesale market, following a
successful fundraise, is a strong endorsement for both IPSX, as a
nascent capital market for real estate and the proposed asset
management and remediation strategy that is to be undertaken at
Bridgewater Place.
"The acquisition of this capital compromised, but fundamentally
core, asset will allow investors to take part in a major
repositioning that will create one of Leeds's premier office
destinations in what is, and will remain, a supply constrained
market due to the current cost of construction. Furthermore, the
equity raise has made allowance for BWP REIT Plc to tackle one of
the core issues facing many freeholders and their leaseholders,
namely cladding remediation. BWP REIT Plc will be undertaking a
full remediation of the cladding without recourse to the
leaseholders within the residential element of the building. This
we believe will make a material social impact.
"The admission of BWP REIT on IPSX Wholesale creates liquidity
and transparency for investors, where previously participation in
such a transaction would not allow it."
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
M7 Real Estate Financial Services Ltd (via FTI Consulting below)
(AIFM)
Richard Croft, David Ebbrell, Tony Edgley
WH Ireland Limited (IPSX Lead Adviser T: 020 7220 1666
and Settlement Agent)
Advisory - Chris Hardie, Darshan Patel,
Sarah Mather, Andrew de Andrade
FTI Consulting (PR Adviser) Tel: 020 3727 1000
Richard Sunderland, Eve Kirmatzis, Oliver E: M7@FTIConsulting.com
Parsons
Further information on the Company can be found on its website
www.bwpreit.com .
Important notice
The content of this announcement, which has been prepared by and
is the sole responsibility of the Company, has been approved by M7
Real Estate Financial Services Ltd (which is authorised and
regulated by the Financial Conduct Authority) solely for the
purposes of section 21(2)(b) of the Financial Services and Markets
Act 2000, as amended.
This announcement is being issued in the United Kingdom to
and/or is directed only at persons who are professional clients or
eligible counterparties for the purposes of the FCA's Conduct of
Business Sourcebook. The opportunity to invest in the Company is
only available to such persons in the United Kingdom and this
announcement must not be relied or acted upon by any other persons
in the United Kingdom.
This announcement does not constitute an offer or recommendation
concerning the Ordinary Shares. Any prospective investor must carry
out their own due diligence and should form their own assessment,
and is recommended to consult an independent professional adviser
as to the suitability of the Ordinary Shares and evaluate all
matters addressed herein.
The information contained in this announcement is for background
purposes only and does not purport to be full or complete. No
reliance may be placed for any purpose on the information contained
in this announcement or its accuracy, fairness or completeness.
The distribution of this annoucement and/or any offer, sale or
purchase of, or application to subscribe for, the Ordinary Shares
may in certain jurisdictions be restricted by law. Prospective
investors and persons into whose posession any document or other
information referred to herein are required to inform themselves
about, and observe, any such restrictions. It is the responsibility
of each prospective investor to satisfy itself as to full
compliance with the applicable laws and regulations of any relevant
jurisdiction, including obtaining any requisite governmental,
regulatory or other consent and observing any other formality
presented in such jurisdiction. Neither this announcement nor the
information contained herein is for publication, distribution or
release, in whole or in part, directly or indirectly, in or into,
the United States (including its territories and possessions, any
State of the United States and the District of Columbia),
Australia, Canada, Japan, South Africa or any other jurisdiction
where to do so would constitute a violation of the relevant laws of
such jurisdiction.
This announcement does not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States, Australia, Canada, Japan, South Africa or any
other jurisdiction where such offer or sale would be unlawful. The
Ordinary Shares mentioned herein have not been, and will not be,
registered under the United States Securities Act of 1933, as
amended (the " Securities Act "), or with any securities regulatory
authority of any state or other jurisdiction in the United States.
The Ordinary Shares may not be offered or sold in the United States
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. No
public offering of securities is being or will be made in the
United States.
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These statements
reflect beliefs of the Directors (including based on their
expectations arising from pursuit of the Company's strategy) as
well as assumptions made by the Directors and information currently
available to the Group. Although the Directors consider that these
beliefs and assumptions are reasonable, by their nature,
forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors that may cause the
Group's actual financial condition, results of operations, cash
flows, liquidity or prospects to be materially different from any
future such metric expressed or implied by such statements. Past
performance cannot be relied upon as a guide to future performance
and should not be taken as a representation that trends or
activities underlying past performance will continue in the future.
Forward-looking statements speak only as of the date they are made.
No representation is made or will be made that any forward-looking
statements will come to pass or prove to be correct.
WH Ireland, which is authorised and regulated in the United
Kingdom by the FCA, is acting exclusively as Lead Adviser for the
Company and no-one else in connection with the Issue and Admission
and will not regard any other persons as its client in relation to
the Issue and Admission and will not be responsible to anyone other
than the Company for providing the protections afforded to clients
of WH Ireland, nor for providing advice in connection with the
Issue and Admission or any other matter or arrangement referred to
in this announcement.
No key information document has been prepared in respect of this
annnouncement or the Ordinary Shares in accordance with Regulation
(EU) No 1286/2014 on key information documents for packaged retail
and insurance-based investment products (PRIIPs) (and in the case
of the United Kingdom, such regulation as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act
2018). Accordingly, the Ordinary Shares are not available to, and
no person may advise on, offer or sell Oridnary Shares for or to,
any retail client (as defined in MiFID II) in the European Economic
Area or the United Kingdom.
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(END) Dow Jones Newswires
November 15, 2022 10:31 ET (15:31 GMT)