Stock Market Listing


Notwithstanding private equity cases, participations in indirect property investment are made marketable or admissible for trading to improve their negotiability.

The aspects of the initial public offering are explained on the bass of the following items:


No initial public offering is without its advantages. The main advantages are:

  • Broadening of the investor basis to include private and institutional investors
  • Publicity and reputation
    • Real estate purchase offers
    • Cooperation offers
    • Advantages for client contacts
    • Advantages for staff recruitment / access to qualified management staff
    • Staff satisfaction (working for a renowned company)
  • Capital procurement
    • Cheap equity capital procurement through the stock market
      • for small IPO volumes, IPO costs are often higher than the financing costs – difference between procurement of equity capital and borrowed capital
      • but no repayment obligation unlike debt financing
  • Disinvestment or exit options
  • Employee participation

The advantages usually outweigh the disadvantages (the bottom line is invariably an enhanced reputation).


There are disadvantages to everything, also when a property company goes public:

  • Disclosure of the company’s internal affairs
  • Loss of influence
  • Poss. foreign domination
  • Costs and poss. taxes
  • Time involved
    • Annual reports
    • Quarterly reports
    • Roadshows
    • Analyst meetings
    • Investor conferences
  • Liability risk (prospectus liability)
  • Dangers of speculation
  • Negative publicity (when the press “have a real go” at the company)

Stock Exchanges

Legal entities that wish to go public have the following listing options:

  • Local stock exchanges
    1. Zurich (SIX Swiss Exchange)
    2. Berne (BX Berne eXchange)
  • Types of stock exchange
    1. Main stock exchange
    2. Dealing before official hours
  • Stock exchange segment
    1. In casu: SIX Swiss Exchange Standard for property transactions
    2. In casu: BX IMMO

IPO Scenario

The following aspects should be considered when going public, whereby this list is not exhaustive:

  • Initialisation of property company (with high aspirations)
  • Systematic expansion and streamlining of the property portfolio
  • Company structuring
  • Positioning of the company on the market
  • Attainment of a specific size of company (not a “capital market dwarf”)
  • Company requirements for an IPO
  • Choice of advisers during the flotation
  • IPO decision
  • IPO preparation
  • Capital increase
  • Stock market listing
  • Commencement of trading
  • Price management
  • Market making / designated sponsors
  • Aftercare

Secondary Market Offering

A secondary market offering (also secondary public offering) exists when one or more (original) shareholders of the company that is (already) listed on the stock market arrange a public offering of their shares. It is thus an alternative to selling shares through normal stock exchange dealings.

Such a secondary market offering results in more shares arriving on the market and in diversified holdings, which is beneficial for securities trading, unless it takes place at the end, then it is a block sale.

Alternative: Reverse Takeover

A so-called reverse takeover (also reverse IPO or “back door listing“) is also an option for a property company limited by shares. A company that is not listed on the stock market can thus be traded on the stock exchange provided it is already merged with a company that is listed on the stock market

Private entrepreneurs can choose this approach in order to pursue their exit strategy, instead of selling the company privately. This strategy saves time and money.

Shell company

A company that is listed on the stock market is a so-called shell company that has ceased its day-to-day operations and merely manages its assets, e.g. real estate, securities and cash. Such companies offer investors an attractive alternative to their own IPO. It saves time and IPO costs and the original name and reputation of a company may be adopted. In this case, a proscribed shell of a company limited by shares with no assets is non-existent.

The acquisition and use of the shell company depend on the strategy adopted by the investor. There are many “flexible options”:

  • Participation level
    • Acquisition of shares
    • Capital increase + subscription by the new investor, with or without exclusion from subscription rights
  • Company level
    • Consolidation or resumption of current or former core businesses
    • Contributions in kind by an operational business
    • Merger with an operational company that is not listed on the stock market
    • Use losses carried forward for taxation purposes
    • and so on

Real Estate Indices

Real estate share indices can now be traded as well as participating interests in real estate:

SXI Real Estate Index

SXI Real Estate Shares Subindex

Factsheet SXI Real Estate

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