Walls & Futures REIT PLC (WAFR) Walls & Futures REIT
PLC: Notice of General Meeting 06-Feb-2023 / 11:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
6 February 2023
WALLS & FUTURES REIT PLC
("Walls & Futures" or the "Company")
Notice of General Meeting
Walls & Futures REIT plc (Ticker: WAFR), the Ethical Housing
Investor and Developer, announces that a general meeting of the
Company's shareholders will be held at Octagon Point, 5 Cheapside,
London, EC2V 6AA on 23 February 2023 at 1.00pm (the "GM"). A
circular to shareholders including the notice of the GM (the
"Circular") will be posted to shareholders today, and a copy of the
Circular will be added to the Company's website.
The key elements of the Circular are extracted below.
For further information, contact:
Walls & Futures REIT PLC 0333 700 7171
Joe McTaggart, Chief Executive
Website www.wallsandfutures.com
Allenby Capital Limited (Corporate Adviser)
Nick Harriss/James Reeve 020 3328 5656 1. Introduction
The goal of the board of directors at Walls & Futures (the
"Board") has been to generate long-term, sustainable income by
making investments in a portfolio of real estate with an ethical
focus. Our strategy was to get a total return by combining the
capital we made from developing our own assets with the long-term
income we would receive from the long-term indexed leases on the
finished projects.
Although the investments we have made have produced returns that
are above average, finding institutional investors to help us scale
has been one of our biggest hurdles. Sadly, we discovered that our
approach was inapplicable to funds run by institutional investors,
whose objectives were to produce either income or capital returns,
but not both.
In order to scale the Company in terms of equity investment and
investment capacity to deliver long-term secure income through
ethically focused property investments, we have been in regular
communication with a number of strategic investors.
Unfortunately, we were unable to complete a partnership in time
for our 2022 annual general meeting (the "AGM"), so an alternative
proposal was made to refocus just on building our Pax Homes home
for autistic people and to surrender our REIT status.
Following approval of this strategy change at the AGM, the Board
has been seeking financing solutions for a material Pax Homes roll
out, resulting in promising discussions with several lenders. While
we are currently considering funding options which the Board
consider would deliver attractive returns to shareholders over a
period of 3 to 5 years, the Board's view is that shareholders
expect material progress prior to this in light of the recent
budget and increase in interest rates.
As announced on 23 December 2022, Vengrove, a UK focussed,
vertically integrated, real estate investment manager with a
10-year track record (consisting of a group of different legal
entities, collectively referred to here as Vengrove), has become a
significant shareholder in the Company, with a purchase of 250,000
ordinary shares of 5 pence each in the capital of the Company
("Ordinary Shares"), approximately 6.66% of the Ordinary Shares.
The Board have had several discussions with the Vengrove team and
have agreed what both parties believe will be an opportunity for
shareholders to benefit in the medium to long term, taking
advantage of the Company's current real estate investment trust
("REIT") status, as well as from the potential of Pax Homes over
the longer term. The plan we have worked together is designed to
build a strategy and action plan that we believe will give the
Company the funding and investment platform it needs to grow and
begin paying dividends in 2023 (the "Proposals").
I'm happy to have found a strategic investor with whom we can
partner to accomplish our initial goal of generating long-term
stable income from a portfolio of property assets with an ethical
focus. As of Q3 2022, Vengrove had GBP650m of assets under
management including residential, commercial (office and
industrial) and operational real estate. Vengrove currently have a
team of 21, who bring a depth of knowledge and expertise covering
all aspects of real estate investment management. Together they
have the capability to acquire, develop, asset manage and finance
real estate transactions in-house. 2. The Proposals
The Board has called the GM so our shareholders are being asked
to approve resolutions necessary for the implementation of the
Proposals. The Proposals will require the issue of new Ordinary
Shares for cash to subscribers to be procured by Vengrove in order
to progress the revised strategy that is set out below. The
implementation of the Proposals will result in the number of
Ordinary Shares in issue increased by a factor of approximately 10,
and this requires the approval of shareholders.
The revised strategy involves the retention of the Company's
status as a REIT under UK tax rules. To enable this, the resolution
put and approved at the AGM to remove the requisite article from
the Company's Articles of Association is being proposed to be
reversed.
This letter explains the background to, and reasons for, the
Proposals and explains why your Board considers the Proposals are
likely to promote the success of the Company for the benefit of the
Company's shareholders as a whole and why the Board unanimously
recommends that you vote in favour of the Resolution to be proposed
at the GM, notice of which is set out at the end of this document.
3. Platform for growth and dividend
Below is an outline of the proposed changes in structure,
strategy and funding that we believe will be required to deliver
the capital and investment platform required to drive growth and
begin paying dividends in 2023.
Structure
The Company is currently structured as an internally managed
investment company. It is proposed that the Company adopts a more
conventional structure, in line with other UK REIT and appoint an
external investment manager, Vengrove SI-REIT Advisors Limited, a
constituent of the Vengrove group, who will be delegated the
responsibility of raising capital and the executing the investment
strategy. It is proposed this change will coincide with an initial
fundraise which is outlined later in this document.
The Company will retain the Company's status as a real estate
investment trust ("REIT"), which had previously been set to be
relinquished following the vote at the AGM.
During this process we will appoint a board member from the
Vengrove team, who will step-down once the initial fundraise is
complete.
The Board has concluded that the further development of the Pax
Homes business will be best undertaken externally if the Proposals
are approved, as development activities will not be compatible with
the revised strategy. If resolutions 1, 2 and 3 are passed at the
GM, it is proposed that the Pax Homes business will be sold to
Joseph McTaggart, structured in a way that will provide a
reasonable return to the Company's shareholders for the investment
made to date. It is anticipated that the transaction will complete
prior to the end of the Company's current financial year, at which
point full details of any such transaction will be announced.
Investment Strategy
In order to scale the Company in terms of equity investment and
investment capacity to deliver long-term secure income through
ethically focused property investments, we will no longer develop
and will acquire stabilised income producing real estate assets.
This will enable us to scale faster and pay a dividend.
It is proposed that the Company will broaden its investment
strategy, targeting social infrastructure which is defined as
foundational assets that support the quality of life of regional
and local communities.
The four core sectors are 1. Affordable Housing - e.g.
Intermediate Rent and Discount to Market Rent PRS (Private Rental
Sector)
Affordable Housing is fundamental to a fair and healthy
community and those most vulnerable are impacted the most. The REIT
will acquire affordable housing to lease to key workers and others
finding it hard to afford market rent prices across the UK. 2.
Education - e.g. Children's Nurseries, Special Education Needs
& Schools
Education is an essential pillar in driving economic growth in
local communities across all age groups. The REIT will acquire key
educational facilities to further support the education/training of
individuals across communities. 3. Roadside & Transport - e.g.
Service stations (EV & Petrol), Car Parks, Bus depots
Community urban infrastructure assets are the physical
facilities needed to support and sustain a community of people to
live and work. The REIT will acquire roadside & transport
assets that act as key infrastructure for a local community and
beyond. 4. Civic, Community & Justice - e.g. Community Centres,
Libraries, Law Courts, Recycling Facilities
Civic, community and justice buildings often embody the identity
of the communities they serve. In addition to official functions,
they fulfil a variety of other purposes such as a place to meet.
The REIT will acquire community assets that are used for the
well-being of the wider community.
In order to more effectively reflect the company's ongoing
strategy, the Board also proposes changing the name of the company
to Social Infrastructure REIT.
Investment & equity funding
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