Harvey Nics Delivers Mailbox IPO Boost
M7, recent buyer of Birmingham’s 690K SF Mailbox live-work-play complex, will have breathed a sigh of relief this week when anchor retail tenant Harvey Nichols announced its department store would reopen.
The reopening of the 45K SF luxury department store, due on Friday, boosts the chances of a successful £62.5M IPO of a stake in the building through a single-purpose REIT. The IPO raises cash to complete a rethink of the building's troubled retail floorspace and to clear debt.
The prospect of a repeat of John Lewis’ decision not to reopen its 247K SF department store at Grand Central, Birmingham, had been haunting the Mailbox sale. Earlier this month it was announced that the IPO timetable was to be extended.
The IPO, in the form of the first UK placing of a single commercial property asset on the International Property Securities Exchange in London, is part of the answer to the long-standing problem of ownership of the multi-let building.
Brockton Capital put the UK’s largest mixed-use building outside London up for sale in July 2018. CBRE was appointed to market the 690K SF development on behalf of Brockton and its partner Milligan at a reported price of £235M. The sale was suspended in April 2019 and resumed in October 2019 at the lower price of £200M with a potential buyer, M7 Real Estate, said to be in the frame.
A deal was eventually agreed at £190M, prompting M7 to rethink the building’s mix of retail and leisure space.
The £62.5M IPO is focused on Mailbox REIT, a single asset company that owns the Mailbox building, and would see investors buy a stake in the asset. The placing provides the kind of liquidity that is rarely available for large regional assets.