Special Opportunities REIT (SOR) has published its IPO prospectus, targeting £500m in its initial placing, with commitments totalling between £104m-119m already received from three cornerstone investors GoldenTree Asset Management; TR Property Investment Trust and other Columbia Threadneedle investment funds; and the Bhavnani family office.
SOR plans to capitalise on the dislocated UK commercial real estate market, setting its sights on high-quality properties sold by distressed or highly motivated sellers.
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The management team believes the attractive pricing of pipeline investments is due to a structural oversupply, driven by market conditions, including a lack of appetite from major UK real estate lenders to refinance certain existing loans where LTVs have risen to unstainable levels, and a significant backlog of unfunded development opportunities.
The board expects to fully deploy the net IPO proceeds, subject to the maintenance of sufficient working capital, within a period of six months of the initial issue.
The internal rate of return for the REIT is targeted at a minimum 12-15% per annum, with a potential of delivering over 20% IRR, both comprising income return and capital growth, and a regular income return.
SOR will close applications in respect of the IPO on 11th June 2024.
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