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GPE Raises £350M In Rights Issue As Special Opportunities REIT Pulls £500M IPO

While GPE's £350M right issue is almost complete, Special Opportunities REIT has ditched its IPO.

In contrasting capital raising fortunes, Great Portland Estates has raised gross proceeds of £350M from a rights issue while Special Opportunities REIT has pulled what would have been the largest IPO of the year after failing to gain minimum commitments of £250M.

GPE’s fundraising will be used to develop its pipeline and seek acquisitions, the company said after the London landlord announced its plans for a rights issue in May.

GPE has confirmed that it has received acceptances from existing shareholders in respect of 96.8% of the new shares, which will raise proceeds of around £336M net of expenses.

“The combination of the capital’s disrupted investment market and the increasingly evident supply drought of high quality spaces in our core market of the West End, means we are optimistic about the returns we can generate from both our £1.4B pipeline of potential acquisitions and across our existing HQ and flex offerings,” GPE Chief Executive Toby Courtauld said in a stock market statement.

Meanwhile, Special Opportunities REIT has withdrawn plans for its £500M IPO after falling short of its minimum fundraising target, another blow to the London Stock Exchange that brings to a halt the first stock market listing of a UK real estate investment trust for three years.

The REIT confirmed that despite “strong investor demand,” it had failed to meet the £250M minimum fundraising required for its public listing to move forward and added that management would now seek capital from the private markets instead.

The REIT had previously announced that it would focus on high-quality but under-managed UK real estate assets, including student accommodation, retail parks and budget hotels, and had targeted a minimum annual return of between 12-15%. 

“Having considered their options, the board did not believe it would be in the best interests of investors to reduce the minimum fundraise below £250M given the nature of the market opportunity and pipeline,” the REIT said in a statement.

Special Opportunities REIT was incorporated in January and said in May that it was targeting a fundraise of £500M, which would have made it the largest IPO on the London Stock Exchange this year.

Three cornerstone investors, GoldenTree Asset Management, TR Property Investment Trust and Columbia Threadneedle Investments, plus the Bhavnani family office, had made commitments totalling between £104M and £119M. The management team and non-executive directors had pledged a further £4M.