By Ryan Weeks on Tuesday 18 November 2014
The UK’s fastest growing equity crowdfunder continues to make noise with a truly unconventional fundraise.
SyndicateRoom will to all intents and purposes co-host the IPO of Mill Residential REIT – the UK’s first residential Real Estate Investment Trust. Mill Residential is aiming to create a diversified portfolio of residential properties in London and Southern England. The REIT will allow individuals to invest in property without having to face onerous monetary costs or the burden of acting as a landlord. But all UK REITs must be listed on a UK stock exchange – so where does SyndicateRoom fit into this?
The ascendant equity crowdfunding platform has in fact become the vehicle through which Mill Residential is raising a significant portion of the required £2.1m – of which just over £1.6m has already been accrued. However, and in accordance with the SyndicateRoom model, that c. £1.6m was not committed by private investors but instead as seed capital from the REIT’s managers. SyndicateRoom will hold all funds invested within an escrow account until the REIT lists on a UK stock exchange – which is expected to happen before the end of the year. When shares in the REIT are first issued on the unnamed exchange, a proportionate number will go to SyndicateRoom investors.
The IPO will be the first of its kind – marketed to both institutional investors through a traditional pre-listing roadshow, and to private investors via the SyndicateRoom portal. The minimum investment amount via SyndicateRoom is £1,000. If for some reason Mill Residential fails to list, all committed funds will be returned to the platform’s investors.
Those that pile into this round will have the rare luxury of liquidity in the form of whichever exchange the company chooses to list on. They will also have the capacity to track the share price of the REIT – thus staying on top of the value of their investment in a way that equity crowdfunders usually cannot.
Gonçalo de Vasconcelos, founder and CEO, SyndicateRoom, weighed in:
“Mill Group has been successfully investing in and developing the UK’s property market for more than 20 years, and its exceptional pedigree underpins the launch of this pioneering REIT.
“The Mill Residential REIT offers both large and small investors a more liquid way to hold a diverse range of buy-to-let properties in their portfolio, but at a fraction of the cost of owning a property outright.
“That this is the first time a traditional IPO has been combined with crowdfunding is both a testament to Mill Group’s progressive approach and a demonstration of just how sophisticated crowdfunding has become. SyndicateRoom has long established itself as the go-to option for sophisticated investors and companies alike; and we are delighted to be trailblazing by bringing this new class of property investment to market.”
A series of groundbreaking events has set the equity crowdfunding space ablaze over the past few months. We’ve seen the industry poster-child that is ReWalk Robotics go public on the NASDAQ, Chapel Down became the first publicly listed company to attempt an equity crowdfunding campaign and at this very moment Companisto is staging a vote to determine whether or not a group of its investors should sell out of their investments with 2x ROI on the table.
SyndicateRoom’s de facto “co-hosting” of the Mill Residential REIT listing demonstrates the flexibility of both the platform and the sector. These are exciting times for the UK equity crowdfunding space.