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Urban Exposure IPO: Property lender to raise £500m in market float
A residential property lender yesterday announced plans for a £500m stock market float as it seeks to tap into demand for new homes in London and the south east.
Urban Exposure was founded as a property developer in 2002 by former Deutsche Bank risk analyst Randeesh Sandhu, but started providing short-term loans to other developers in 2009.
The group said it had already signed £476m of deals to fund the construction of homes in London and the south east and has a £3bn pipeline of further projects equal to 8,000 homes.
The float will be backed with £75m from cornerstone investor EFJ Capital, a US-based investment manager.
Sandhu, the firm’s chief executive, said Urban Exposure was “almost exclusively” focused on developments at the middle of the market and that “were affordable to people who work and live in London”.
In February, alongside Topland Group, it provided a £25m loan for the development of Cathedral Group’s Deptford Project. It has also helped finance some luxury deals, including Wainbridge’s acquisition of 11-15 Grosvenor Crescent in December.
Several companies, including student property fund Brandeaux, have been forced to scrap their IPO plans due to recent market worries and disappointing debuts from the likes of Saga and Card Factory, which traded below their issue prices.
But Sandhu shrugged off concerns, saying: “We have had positive feedback because we don’t have any legacy assets and we are not taking any money off the table. We don’t have any issue on pricing because we are floating a brand new vehicle; a pound is a pound.”
Alternative lenders – from insurance companies to fund managers – have been stepping in to real estate finance to fill the gap created by banks, which have cut their exposure
Urban Exposure also hopes to exploit a lending gap of £3bn to £4bn by providing finance to more specialist parts of the market.
BEHIND THE DEAL
EY | RISHI BHUCHAR
- Bhuchar joined EY’s real estate corporate finance team in 2011 as a partner from MGPA, the advisory firm now owned by Blackrock.
- He has been involved in a number of public markets deals, including self-storage company Safestore’s £450m initial public offering in 2007 and the IPO of asset manager Dawnay Day Treveria.
- Bhuchar has spent most of his career in the property industry. Before MGP, he was in the real estate investment banking teams at Citigroup and Deutsche Bank.
Also advising…
Other members of the EY team, which is acting as independent financial adviser to Urban Exposure, include Graham Wood and William Laxton. Deutsche Bank is the global coordinator and bookrunner on the deal, while MHP Communications is acting as Urban Exposure’s PR adviser.