Urban Exposure pulls £500m IPO

Urban Exposure has pulled its £500m London Stock Exchange float citing “the prevailing IPO backdrop”.

The vehicle that was to be known as Urban Exposure Real Estate had planned to use the equity to issue loans for residential development in the capital and announced its intention to float at the start of July. It said that “Management received an encouraging response from prospective investors and the process has resulted in ongoing discussions with a number of them to provide private funding to the wider Urban Exposure Group”.  At the outset the company received support from specialist credit private equity house EJF Capital in the form of a £75m cornerstone commitment.

The company said it has a pipeline of deals of over £3bn and at the time of the announcement of the float £858m of these were agreed exclusively with the company. This morning it said that it will “continue to deploy this pipeline via the current, private funding arrangements the group already has in place and with the benefit of any further funding agreed as a result of this process.” The company had appointed Deutsche Bank as bookrunner and EY is its independent financial advisor.

Urban Exposure is chaired by Ravi Takhar and its chief executive is Randeesh Sandhu (pictured). It currently specialises in underwriting and arranging loans and then syndicating them to partners such as Starwood Capital, LaSalle Investment Management, Revcap and Topland. Its cash generally comes from specialist US debt funds but an IPO or any new vehicle that materialises would provide it with a large pool of discretionary capital.

The real estate IPO market in the UK reemerged in February when Kennedy Wilson raised £1bn for its opportunistic vehicle and since then there have been successful floats for the likes of Nick Leslau’s Secure Income Reit and Empiric Student Property but in June fund manager Brandeaux pulled its £1.1bn float of its student accommodation business Liberty Living and market conditions now appear to have deteriorated somewhat.