UK: Launch Of The IPSX - The World's First Regulated Securities Exchange Dedicated To Commercial Real Estate

A new regulated stock exchange, the International Property Securities Exchange ("IPSX") has launched in January 2019 having received Financial Conduct Authority (FCA) approval and will become the first and only stock market dedicated to commercial real estate ("CRE") assets.

The IPSX is a "Recognised Investment Exchange" under UK law. This means that admission of, and trading in, financial instruments on the IPSX will be conducted in accordance with the FCA's sourcebook for Recognised Investment Exchanges.

The ISPX, which is expecting to see the first issuers undertake initial public offerings in the second quarter of this year, will operate two markets: IPSX Prime (which is currently live) being the core market on which CRE owners can undertake initial public offerings of companies owning a single CRE asset or, if approved, a multiple asset; and IPSX Wholesale (which is still under development) which will focus specifically on closely-held CRE assets (e.g. joint venture held assets) seeking onshore real estate investment trust (REIT) status. The IPSX have made it clear that it is not a market for property development companies and an issuer will only be admitted if property development forms an ancillary part of its business.

It is understood that most issuers will be classified as REITs (subject to satisfying the REIT requirements) and will therefore benefit from the REIT regime and favourable tax treatment.

So what is the rationale for a new stock market dedicated entirely to real estate? Real estate is still deemed an "alternative" asset class despite its scale, performance and global appeal. The CRE market has been a slow industry to innovate (albeit real estate tech is starting to be embraced) and has often been seen as restrictive to smaller investors (particularly retail investors), due, in part, to the industry structure and its relatively illiquid nature. Commercial real estate is still dominated, in the private market, by large, specialist investors buying up whole, or significant interests in, buildings either individually or through joint venture vehicles and, in the public market, by investors acquiring an indirect holding in an investment trust or REIT (which usually invests in a particular class of property) or in a large listed property company such as British Land (which would have a broad ranging business model) or by acquiring units in an open-ended unit trust or a property authorised investment fund (PAIF). In contrast, IPSX investors will be able to buy shares directly in companies holding single commercial real estate assets.

The intention of the IPSX is to widen the CRE market by giving a broad range of investors (from the major institutions down to the high net-worth individuals and retail investors) access to real estate investment in assets that would otherwise not be available to them. The key drivers are to create more diversification (e.g. geography, type of asset, tenant) in the asset class and more liquidity which will come from the market trading of the shares on the IPSX rather than through buying and selling the assets directly. The aim is to build a market based on volume (which will help with trading and liquidity) underpinned by good quality stabilised assets which will provide strong yields but also allows investors to buy and sell their shareholdings in those assets with relative ease and low cost.

Admission to the IPSX may also benefit asset owners as it provides an alternative to raising capital through a partial or total sale on the public capital markets where the owner-occupier can have access to a wider investor pool but has the ability to retain the asset management and/or other elements of control over the asset.

So how does an issuer list on the IPSX? IPSX Prime is a Markets in Financial Instruments Directive (MiFID) regulated market. This means that a prospective issuer must satisfy the relevant requirements of the IPSX Rules for Issuers which set out the procedures, rules and obligations for applicants seeking admission to IPSX and the responsibilities and continuing obligations of issuers. Under the IPSX Rules for Issuers the following admission criteria will apply:

  • The Issuer must be a "Single Asset Issuer" or, by exception only, a "Multiple Asset Issuer". A Single Asset Issuer is defined as an issuer owning the whole or entirety of an institutional grade real estate asset, having a commercial purpose, with a market value in excess of £50 million, and which occupies a single geographic area or comprises a single building or group of co-located buildings (e.g. a retail park). By contrast, a Multiple Asset Issuer is identified as an issuer that does not meet the definition of Single Asset Issuer but who wholly owns commercial real estate assets, with a market value in excess of £50 million, which show a significant degree of commonality (e.g. type/sector, tenant, geographic location, master lease). This will be determined on a case by case basis but we understand this could include, for example, a group of hotels or supermarkets.
  • The Issuer must be duly incorporated and conform with the laws and regulations of its place of incorporation.
  • An application for admission of any class of financial instruments must relate to all financial instruments of that class, issued or proposed to be issued. In addition the financial instruments to which the application for admission relates must (i) benefit from pre-emption rights on an issue of new shares for cash, (ii) be transferable and freely negotiable and (iii) be eligible for electronic settlement in the central security depositary.
  • The issuer must have published a prospectus (unless a relevant exemption applies) which must include the information required by the Prospectus Directive and the IPSX Rules for Issuers (Schedule One) and must be approved by the FCA.
  • The issuer must appoint and retain:
    • An IPSX approved valuer (and must include a valuation report in any prospectus).
    • An IPSX Lead Adviser with responsibility for assessing whether or not an applicant satisfies all the requirements for admission to IPSX.
    • At least one market maker to register in the applicant's financial instruments upon admission to trading.
  • The issuer must ensure that at least 25 per cent. of the shares to be admitted to IPSX must be in public hands (a "minimum free float").
  • The issuer must specify the corporate governance arrangements which it has decided to apply and comply with their chosen arrangements.
  • If the issuer intends to deploy leverage it must have a maximum loan to value ratio of 40 per cent. at the expected date of Admission.
  • All related parties and applicable employees at the date of Admission must agree to a restricted lock-in period of at least one year from the date of Admission.

Read the original article on

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions