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M7 Multi-Let pursues private funding, scraps London IPO plan

[LONDON] M7 Multi-Let REIT, a new firm set up to invest in industrial and office property, has become the latest business to scrap plans to float in London, pulling a listing that would have raised as much as £300 million (S$537.58 million).

M7, which announced its intention to float as a real estate investment trust (REIT) last month, said a number of investors had instead expressed an interest in providing funding privately to support its property expansion.

"This, combined with the current market conditions and the volume of recent issuances focusing on UK real estate, led the board to conclude that the initial portfolio and pipeline would be better funded privately over the near to medium term," said Richard Croft, the chief executive of M7 Real Estate.

M7 said on Oct 10 that it had agreed to buy 93 property assets for £119.8 million - its so-called initial portfolio - and that it had also identified a pipeline of potential acquisitions valued at more than £400 million.

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Its decision to call off the listing to finance those deals marks another setback for the London Stock Exchange, which has been hit in recent weeks after BGL Group, broadcasting masts firm Arqiva, debt collector Cabot Credit Management and business services firm TMF Group all pulled floats.

"The exchange has not been affected by recent IPO cancellations. Figures show that 2017 has already vastly exceeded both 2016 and 2015, with money raised increasing by four times and with double the number of IPOs in 2017 compared with 2015," a spokeswoman for LSE said.

"We have also had the largest number of REIT IPOs globally so far this year," she said.

M7's decision will increase attention on motor insurer Sabre, which is pursuing a London float after announcing its listing plans this month.

A source familiar with the matter said on Nov 13 that the company was looking for a £600 million valuation from the initial public offering but it could fall short of that target.

Sabre this week set the price range for its shares at 220 pence to 240 pence, which would give it a market capitalisation of between £550 million and £600 million.