The real estate and property sector accounted for the largest proportion of IPO listing in London in 2017 according to EY’s latest IPO Eye report.
Real estate led the way in 2017, with a 15% share of UK IPOs, ahead of industrials (13%), financials (11%) and materials (11%). The sector also accounted for 17% of funds raised, behind financial services (32%) and just behind energy (18%).
2017 saw a total of ten real estate IPO listings – nine on the Main Market and one on AIM – raising £1.8bn. This compares with four IPOs in 2016 raising £711m – two on the Main Market and five on AIM.
Glenveagh Properties plc, which listed in Q4 2017 on both London and Irish Exchanges, was the largest IPO, raising £550m of capital. Nine of the listings were also REITS compared to two in 2016.
Julie Green, Real Estate Associate Partner at EY, comments: “The desire for long-term, stable returns from real estate has been the key driver for the increase in listing in 2017 which underpins the confidence that investors have in the UK market.”
Regulatory stability to boost listings in 2018
Wider UK IPO activity should benefit from a number of upcoming Financial Conduct Authority (FCA) rule changes, which will clarify and enhance the listing process in ways that are beneficial to foreign companies seeking to list in the UK. The biggest FCA change relates to the timing of the IPO documentation, which would be effective from 1 July 2018, and the concessions for premium listings for property companies which became effective from 1 January 2018.
Helen Pratten, EY Real Estate Partner, concludes: “Following these changes, we may see a wider range of real estate listings, aside from REITS. It remains important, however, for any business that wishes to list to understand the commitments and responsibilities of being a listed entity, as well as the opportunities it presents.”
