# IPSX The first regulated property exchange in the world

- Link: https://www.directorstalkinterviews.com/ipsx-the-first-regulated-property-exchange-in-the-world/412785890
- Published: 2019-06-24T07:54:43+01:00
- Author: Giles Arbor

**A regulated exchange like no other.**
This is the first and only regulated securities
exchange – anywhere in the world – dedicated entirely to real estate. It will be
the venue for investors to trade shares in single-asset-owning real estate companies,
or multi-asset real estate companies where there is commonality in the assets. For
simplicity, we refer in this document to singleasset real estate companies as SARCs.
The unique benefits of SARCs are increased transparency and cost efficiency, in 
contrast to wider-ranging REITs (Real Estate Investment Trusts). IPSX has explicit
and robust requirements of issuers as regards initial and ongoing disclosure, as
well as transparency and board governance. Investors and issuers will be excited
by the new opportunity that IPSX will provide. In short, IPSX reimagines real estate
investing.

 * **The reassurance of a Recognised Investment Exchange:** The Financial Conduct
   Authority (FCA) approved IPSX in January 2019 after a long process that included
   examination of IPSX’s infrastructure, trading and settlement processes, and outsourced
   partners.
 * **Wide appeal:** The fractional ownership of ‘quasi-direct property’ through 
   IPSX will attract the widest range of investors, e.g. retail investors will be
   able to access what is effectively a new asset class. Family offices have a clear
   preference for direct property ownership. Institutional investors will value 
   the chance not just to consider a wider pool of assets, but also to use SARCS
   as part of a strategy to improve liquidity in Open Ended Investment Companies(
   OEICs).
 * **Secure assets:** IPSX quoted companies will own completed, fully-let, long-
   lease real estate developments, providing a secure income, as well as an opportunity,
   for capital growth. A minimum of 25% of the shares will be available to new investors,
   and gearing will be capped at 40% on listing.
 * **Low operating costs:** By focusing on single assets or multiple assets with
   commonality, SARCs should have very low running costs.
 * **Low transaction costs and faster completions:** Deals in the direct property
   market can take six months to complete and incur substantial costs (Stamp Duty
   Land Tax alone can be 5%). IPSX offers investors exposure to proxies for direct
   property at a fraction of the cost and with completion in a matter of days.
 * **Investors appreciate focused real estate:** While even well-regarded generalist
   REITs can trade at wide discounts to Net Asset Value (NAV), market appetite for
   specialist REITs means that their share prices currently trade at a small premium,
   on average. SARCs will enable investors to take this focus even further.
 * **Liquidity and low correlation:** By bringing to the table investors with differing
   strategies and time horizons, IPSX should see strong levels of liquidity. We 
   argue that, given the nature of some likely investors on IPSX, SARCs may have
   even lower correlations to other assets than existing property – another attraction
   for some investors.
 * **An attractive venue for issuers:** IPSX will generate wide interest among issuers.
   Just one example illustrates this: we might see generalist REITs ‘spin off’ part
   ownership of an asset to demonstrate to the market that they deserve a smaller
   discount to NAV.

[DOWNLOAD THE FULL REPORT](https://www.hardmanandco.com/wp-content/uploads/2019/06/IPSX-Group-The-first-regulated-property-exchange-in-the-world-reimagining-real-estate-investing-20.06.19.pdf)

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