British Land will insert an iconic property, worth an eight- or nine-figure sum, into a special-purpose vehicle by the end of June. Shares in the SPV will be sold via an initial public offering. This will be the maiden float on the new International Property Stock Exchange (IPSX), which last month was given permission by the regulators, after a five-year gestation, during which many assumed IPSX had floundered.
OK, the name and nature of the first IPO is a guess. But BL was the first of three backers to commit a total of £12m to the venture in 2017. The smaller latecomers are Ian Rickwood’s Henley Investment and Richard Croft of M7 Real Estate. The FCA insists £6m be held in escrow to protect investors. The other £6m is to cover running costs of the business, which has 13 staff and offices in Mayfair and Guildford.
The founders, led by banker Anthony Gahan, hold 20% of IPSX; the other 80% lies with the three backers. The business plan supposes earning 2% in fees on floating £20bn of assets over five years; costs adjacent to selling – a point used against IPSX by agents afraid of losing sales fees. If the share price falls 20% and the original owner still owns 40% of the SPV, their value automatically falls. A real risk.
IPSX has the potential to replace ‘discount to NAV’ as the new comparator with Red Book valuations. A good thing. The exchange will allow the public to trade commercial property after 30 years of stalled attempts. A good thing. There are indications that residential property owners (Grainger?) might use IPSX. A good thing. The only bad thing would be if BL’s iconic property turns out to be a shopping centre.
It’s a woman’s world
Talking of BL, put yourself in the well-heeled shoes of Tim Roberts, 54, and Charlie Maudsley, also 54. Last week, the two directors were given Brexit day exit orders by chief executive Chris Grigg. The more reserved Roberts has worked at BL since 1997. He tends the office portfolio. The more outgoing Maudsley joined in 2010. He tends retail and leisure. From 29 March, the 14-strong board will contain three rather than five working directors. The single replacement for the pair, Darren Richards, will get his seat once he’s proven up to the job of doing both roles.
So why has Grigg sacrificed two successful men at the height of their powers? In order to advance the cause of female representation? No one has done more than Grigg to switch old-guard attitudes towards women from negative to positive. His championing of diversity will bring charges of pandering, as the exiting of two senior males came with the simultaneous announcement of the elevation of two females, Emma Cariaga and Sally Jones, to the lesser executive board. This view insults both women.
Roberts (2018 remuneration £1.1m) and Maudsley (£1.1m) will be fine. But both could be forgiven for thinking they are entering a board-level jobs market where being a woman counts unfairly. As one high-flying female with half a dozen jobs told me: “Head-hunters have plenty of males on the books. What they cannot find is enough board-level women. Great for me!”
Some males in property may feel the filling of diversity quotas with the appointment of less experienced females is wrong. The view of all women in property is ‘about time, too’.
Peter Bill is a journalist and author of Planet Property