Life Science REIT completes its IPO, raising £350 million

Life Science REIT announced yesterday that it has successfully completed its IPO, raising £350 million and becoming the first London-listed real estate investment trust focused on UK life science assets.

The REIT had said last month that it planned to raise £300 million and float on the London Stock Exchange’s junior Alternative Investment Market (AIM). The company received applications exceeding the maximum £350 million size of the issue and as a result a scaling-back exercise has been undertaken.

New ordinary shares were issued at £1 each and the company has made an application for 350 million shared to be admitted to AIM. Dealings are expected to start tomorrow under the ticker LABS.

Life Science REIT is targeting a net asset value return in excess of 10% per annum and an initial dividend yield of 4% per annum which is expected to increase to 5% in the short term, the group said.

“We are delighted to see such strong support from a broad range of institutional and retail investors for the issue, the proceeds of which will enable the company to begin investing in an extensive pipeline of projects,” said Claire Boyle, chair, Life Science REIT.

Investors will have exposure to a diversified portfolio of asset across the UK, with a particular focus on the so-called “Golden triangle” of Oxford, Cambridge and St Pancras in London. The assets are or will be leased to tenants operating in the fast-growing life sciences sector, including offices and co-working spaces, manufacturing and testing facilities, data centres and laboratories.

“This is the largest London-listed UK REIT IPO since 2016 and its success underlines the significant opportunity we have identified in the UK life science property sector, which is not currently represented by a specialist business on the public markets,” said Simon Farnsworth, managing director, Ironstone Asset Management. “We will now act quickly to advance the pipeline of income-producing opportunities and development opportunities currently under exclusivity or in advanced negotiations.”