It may soon be possible to buy shares in your own office. International Property Securities Exchange (IPSX) will enable owners of individual commercial properties to float their buildings on a regulated market, in much the same way that other exchanges do at the moment for equity or debt, says Tom Knowles in The Daily Telegraph.
Those listing their properties on the exchange will be property owners whose buildings have a market value of more than £30m. As with a listed company, the building will need to have a board of directors, and all the associated management in place. IPSX’s exchange is designed to allow property owners to unlock equity in what is a fairly illiquid asset, while retaining control of the building.
Both institutional and retail investors will be able to buy shares in listed buildings, and there will be no minimum investment. IPSX also plans to offer a second venue allowing the trading of offshore real-estate investment trusts.
The London-based company recently won the financial backing of commercial property investment specialists Tritax, following on from an investment by British Land in July of this year. The exchange will be “a welcome and timely innovation in the industry”, says Mark Shaw, chairman of Tritax.
It sounds like an interesting idea – particularly given the recent problems experienced by investors trapped in open-ended commercial property funds – but it remains to be seen how securitising the buildings will work in practice. We’ll be keeping an eye on trading costs and liquidity in particular. IPSX is applying for fully regulated exchange status and hopes to open for trading early next year.