BWP REIT (LON: BWP) raised £35m at 100p a share when it joined the Wholesale market International Property Securities Exchange (IPSX) on 16 November. This is a single asset property company.
The asset in question is Bridgewater Place, an office-led mixed-use property of 30 storeys in central Leeds, Yorkshire. There is 252,000 of space that is predominantly let to EY, DWF and Eversheds. The property is valued at £63m by Avison Young and it is nearly 90% let. The ninth floor is unlet.
There is also residential accommodation where the freehold is owned by BWP REIT, but back in 2007 the long leasehold was sold for 250 years.
There are plans for £9m of investment to modernise the building and £11.5m of spending on cladding works. There is likely to be further capital expenditure. Contracted rent is currently £6m a year. After the refurbishment spending then the market rent could increase to up to £7.7m a year.
The expenses of the deal and flotation were £2.8m, leaving £32.2m and the company was valued at £35.1m. WH Ireland is the lead adviser to BWP REIT, and it is also a market maker along with Canaccord Genuity. The asset manager is M7 Real Estate.
The current bid/offer spread is 98p/103p. Pro forma net assets are £29.3m and there is net debt of £33.6m.
Management estimates that on completion of the capital investment then the value of the property could increase to around £130m.