Three promising share floats you CAN invest in...
THIS year is shaping up to be a bumper one for stock market flotations. More than 80 companies have already listed their shares so far, raising around £14billion between them. By December, the total number of firms will be even higher, with proceeds topping £15billion.
Many of these shares are only offered to individual investors once they have floated – a travesty of stock market justice, as Wealth has highlighted in recent months. But it seems as if some businesses are beginning to do things differently, offering their shares to investors large and small.
LIFE SCIENCE REIT
LIFE Science REIT is one such business. The company is seeking to raise £300million via a £1 a share offer and it will be the first London-listed company to focus exclusively on life science properties, from laboratories to manufacturing sites and specially configured offices.
Once science was primarily associated with men in white coats and Bunsen burners. Today, drug development is as much about artificial intelligence and digital data gathering as it is about test tubes and experiments. That means those working in the industry, from academic professors to multinational businesses, need high-tech sites with huge digital capacity so they can conduct research and create tomorrow’s new medicines.
Many of the best and brightest firms are in and around Oxford, Cambridge and London. These cities are home to four of the top ten research universities in the world so attract clever scientists, fast-growing businesses and investors looking for good opportunidemand, ties. Yet UK life science firms have far less space than their US counterparts. Oxford and Cambridge have five million square feet of purpose-built laboratories between them. Boston, home of Harvard University, has 30million square feet. Shortage of supply has created growing demand, with firms striving to find top-quality space so they can conduct research, develop new drugs and produce them here in the UK, rather than overseas.
Life Science REIT aims to redress the balance between supply and while benefiting from the generous rents that sector specialists are prepared to pay.
The group has a pipeline of deals valued at £445 million, with six
transactions, worth £305million, already at an advanced stage. Manager Simon Farnsworth therefore expects to spend the proceeds of the flotation within six months, allowing the firm to start paying dividends next summer, targeting an annual yield of 4 per cent in 2022, rising to 5 per cent the following year. Sites to be acquired include a company whose research contributed to the development of Covid-19 vaccines and a gene therapy business analysing DNA to help cure Alzheimer’s disease.
These sites are all within the life science ‘Golden Triangle’ of St Pancras in London, Oxford and Cambridge, where demand is most acute. Farnsworth, a career property man, is highly selective about
MIDAS VERDICT: Britain has long been at the forefront of scientific and medical research but the pandemic has shown how vital this sector is and how much support it needs. Life Science REIT will provide operators with the space to do their best work and the shares should deliver attractive returns as well. At £1, the shares are a buy. the deals that he pursues. But he is also ambitious, hoping to build Life Science REIT into a £1billion business within the next year, coming back to shareholders for more funds as he spots new opportunities.
Shares are on sale now via intermediaries such as Equiniti, AJ Bell and Redmayne Bentley. The application deadline is November 15 with trading set to start four days later. To be traded on: AIM Ticker: LABS Contact: lifesciencereit.co.uk