Canada’s Oxford Properties lining up to buy M7 Real Estate

Canada’s Oxford Properties would appear to be the potential buyer of European property fund manager M7 Real Estate, in a move which would give the investor a greater presence in Europe and give it a platform to develop into third-party fund management.

Oxford Properties is the real estate arm of Canadian pension funds OMERS (Ontario Municipal Employees Retirement System), the pension fund for local government workers in Canada’s largest province. It has been increasing its activities in Asia-Pacific recently, where it aims to scale the region up to 25% of its balance sheet. However, it has been quiet in continental Europe since making waves in 2017 when it bought the Sony Centre on Berlin’s Potsdamer Platz.

M7 Real Estate was set up in 2009 by current executive chairman Richard Croft. The company manages more than 830 mainly multi-tenanted assets across Europe valued at €5.3bn on behalf of investors such as Blackstone, Starwood, Centerbridge, HIG Capital and M&G.

The potential takeover of M7 led to cancellation in the UK last week of the IPO for newly-launched Mailbox REIT, which is fully owned d by M7. The listing had been described as a ‘watershed moment’ as it was to have been the first-ever IPO on the IPSX International Property Securities Exchange, a new market solely devoted to commercial real estate, and which enables the listing of individual property assets. 

M7 is the owner of the Mailbox building in Birmingham’s city centre, a former Royal Mail sorting office that has been transformed into a 65,000 sqm office development. M7 said it was planning to hold on to a 45% stake in the business after the IPO and take over its asset management. The flotation would have seen Mailbox REIT looking to raise Stg66 million pounds at Stg1 pound a share when it listed next month, which would give it a market capitalization of Stg119 million pounds. 

Mailbox said in a statement that while M7 remained fully committed to the IPO and M7’s potential buyer was fully supportive of it, the parties felt it was prudent and fair to wait until there is certainty before continuing with an IPO for the company. A fresh announcement is expected in January.

M7 also had a second asset being primed for flotation on the IPSX – Bridgewater Place in Leeds, which it likewise was buying (for €94m) ahead of a potential IPO on the fledgling exchange, of which Croft is also a non-executive director.