In December 2014, Mill Residential REIT became the world’s first crowdfunded IPO after raising £2,222,520 on SyndicateRoom.
Established by Mill Group, Mill Residential REIT’s strategy was to create a diversified portfolio of residential rental properties in the UK, initially focused in London, Southern England and other areas where attractive opportunities can be found. This gives individuals the chance to invest in property at a fraction of the usual cost and without the burdens and responsibilities of being a landlord.
Mill Residential REIT was the first of its kind to offer exposure to the mainstream buy-to-let market via shares in a company, available to both private and professional investors. This was the first time crowdfunding has been used alongside IFA networks, traditional private placings and an institutional IPO roadshow.
Where are they now?
In October 2015, Directors of Mill Residential REIT concluded that the business should cease trading on AIM, and afterwards start a Members Voluntary Liquidation. In their investor communications they noted that while a number of potential investors made indications of interest, the Company was unable to attract capital of sufficient scale to grow the business’.
Goncalo de Vasoncelos, CEO of SyndicateRoom, commented on the development, saying, _’We note that Mill Residential REIT, a company that raised funds on SyndicateRoom, has decided to cancel its listing on AIM and commence a Members’ Voluntary Liquidation. _
‘The Directors of Mill Residential have clearly taken a pragmatic view on the prevailing market conditions and we recognise that this decision is an example of sensible and appropriate corporate governance. It is important to note that shareholders are estimated to receive 85 - 90 pence per share, representing 85 – 90% of the listing price.
‘Equity crowdfunding is high risk, with losses balanced against the potential for high returns, and this is another example of this young sector ‘growing up’ into an established asset class. Part of this ‘growing up’ is to be open and transparent about the failures as well as the successes – something which remains extremely important to both us and our investors.’