Alternative real estate trading platform IPSX has started to wind down the company as it no longer has “sufficient financial resources to operate as a Recognised Investment Exchange”, said a spokesperson for the platform.
IPSX, which is regulated by the Financial Conduct Authority and aimed to be the world's first regulated exchange for commercial real estate, has been hit by macroeconomic factors, such as rising interest rates and the war in Ukraine, which it said has had a “profound impact on real estate sector sentiment and activity and resulted in an unprecedented decline in commercial real estate values".
The platform was launched with the backing of investment and asset manager M7 Real Estate in 2019 to offer retail investors a chance to own a stake in a commercial property. Two years later, the Mailbox in Birmingham, a mixed-use asset, became the first property to list, followed by Bridgewater Place, an office building in Leeds, and a portfolio of retail warehouses. The properties were originally bought by M7, which also continued to manage them.
The idea behind the exchange was to make real estate more liquid, but daily trading volumes of the shares in the properties remained low. In April, the vehicle owning the Mailbox defaulted on a loan due to a fall in value of the property, which caused a loan-to-value breach, as reported.
“Whilst the wind-down process is ongoing, we continue to have positive conversations with a number of parties that are interested in either investing in, or acquiring, all or part of IPSX UK /IPSX Group, and benefitting from both the platform’s IP and considerable technical expertise that has gone into creating a new regulator-approved stock exchange,” the spokesperson said. “The business has available cash to support operations for the foreseeable future and the current team will remain in place until the wind-down process is complete.”
IPSX made a £5.6 million loss in 2021 against £168,000 of revenues, reported React News. The spokesperson did not comment on the figures.