LONDON (June 12): A British property trust has pulled its London flotation after the owners said they failed to reach the 250 million pound ($319 million) minimum demand required, amid ongoing investor concern about strains in the UK commercial real estate market.
Special Opportunities REIT said on Wednesday it did not believe it was in the best interests of investors to reduce the minimum and would instead buy properties using private capital.
The property trust had been looking to raise 500 million pounds, it said in May.
The firm had hoped to gain traction with investors willing to bet the British property sector had turned a corner, after values tumbled in recent years due to higher borrowing costs and weakened demand for office space following the pandemic.
The decision by Special Opportunities REIT represents a further setback for London’s faltering IPO market, where a long awaited rebound in listings activity has lagged some rivals.
Computer maker Raspberry Pi brought rare good news to market participants after shares soared on its London debut on Tuesday. Online retailer Shein is weighing a float in the UK too, despite some political and investor criticism of its fast-fashion model.
The wider UK economy showed no growth in April, official data showed on Wednesday.
Separately, landlord Great Portland Estates said it had completed a 350 million pounds rights issue to raise capital for fresh property acquisitions, but its bank underwriters may have to pick up a small number of the shares offered.
GPE shares were broadly flat in early trading.
The company said the rights issue had 97% take-up, but nearly 5 million shares had gone unsold.
After market close on Tuesday, the company added that investors which had agreed to take on a further 6 million shares may not be able to do so due to “jurisdictional restrictions”.
GPE said Bank of America, Deutsche Numis and JPMorgan Cazenove acted as joint bookrunners, while Santander was co-lead manager. The bookrunners are now seeking other subscribers, GPE added.
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