Property Week 2014

Mill Residential is poised for a stock market listing in time for Christmas after successfully raising almost £3.5m.

The company, which will be the first residential REIT, has raised £985,000 through a placing and £2.5m from crowd funding platform SyndicateRoom and investment from the management team. Mill Residential will be chaired by Ian Ellis, who was formerly chief executive of Land Securities Trillium.

Mill Residential is targeting a listing on the AIM stock exchange on 23 December, with a market capitalisation of £3.5m.

The total raised is via the placing is £1m short of what the company indicated that it was targeting when the plans were announced last month. However, the company has attracted investment from three institutions: CF Miton UK Small Companies Fund, Hernhill Limited and Hargreaves Lansdown.

Mill Residential’s initial portfolio comprises seven buy-to-let properties: two flats in London, four houses in Guildford and one in Bristol for a total of about £2.5m. The purchase reflects how the new REIT will look to invest in future. It will focus on areas where there is a mismatch between demand and supply and where yields are around the 4.5% mark.

Rather than buying houses on the direct market, it will look to acquire residential portfolios from companies that would benefit from the capital gains tax advantages of selling to a REIT.

By this time next year, the company’s ambition is to build a portfolio worth some £50m. It is targeting a total share return of 10% and a 3% dividend yield.

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