Trinistar Liverpool S.a r.L, a controlled affiliate of Starwood Capital Group, has appointed advisors to explore a potential listing for a newly formed single asset company, which will own the Capital Building in Liverpool, via an initial public offering on the International Property Securities Exchange (IPSX).
The appointment was made alongside Trinity Investment Management (Trinity), a minority owner and manager of the company.
Upon admission to IPSX, the current proposal would be for the company to become a real estate investment trust (REIT).
The Capital Building occupies close to a 3.5 acre freehold site in the centre of Liverpool’s business district, overlooking the city’s world renowned waterfront. Providing very competitively priced, flexible and contemporary workspace, the building comprises c425,000 square feet of predominantly office space, a c1,100 space car park and commercial retail spaces that include a Tesco Metro unit on the ground floor.
The Capital Building is 82% let with a weighted average unexpired lease term of 22 years (based on space currently let) to five tenants, including a Government-backed entity and a global insurer.
Starwood Capital and Trinity have undertaken a number of significant improvements to the building over the past four years, with close to 150,000 square feet of office space having been refurbished and a further 15,000 square feet of new space delivered to a high specification. A new three-level atrium is currently being created which will provide a number of further amenities including break-out spaces, an arrival reception, social spaces, a café, collaborative workspaces and a modern wellbeing space.
Trinity intends to retain its minority stake in the building and will continue to be engaged as the manager.
With a population of more than one million (including 70,000 in four universities), Liverpool is the UK’s fifth-largest city and is one of the largest office markets in the North West of England. Office vacancies in the city are running at the lowest levels for a decade, as a result of limited quality office space driven by office-to-residential conversions and an absence of new construction starts.
The Capital Building benefits from exceptional public transport connectivity being just 150m from Moorfield Station and less than a mile from Lime Street Station, with a two-hour journey time to London Euston.
IPSX is a Regulated Investment Exchange regulated by the FCA and is the world’s first such exchange dedicated to the initial public offering and secondary market trading of commercial real estate assets.
Federico Bianchi (Head of Asset Management Europe) of Starwood Capital, said: “We have followed the development of IPSX with interest and most recently following the successful listing and subsequent performance of the Mailbox REIT. We believe IPSX offers the dual benefits of providing an important new capital markets option for institutional property owners such as ourselves, as well as providing investors with the opportunity to own shares in a single asset company that owns large high quality real estate that are traded daily on a liquid exchange.
“Having undertaken a number of asset management initiatives over the past few years, we believe that the proposed listing on IPSX would allow us to conclude our business plan for the Capital Building while allowing new investors to benefit from the long term secure income streams from tenants, as well as the potential value creation from the asset management initiatives that have either concluded or are ongoing.