Blackstone swoops on listed UK business property firm

Blackstone has struck a £700mn deal to purchase a British business property firm, because the US non-public fairness group retailers for bargains within the UK actual property sector.

Blackstone has provided to pay shareholders in Industrials Reit a 42 per cent premium to Friday’s closing worth to take the corporate non-public. The UK firm’s board mentioned it will advocate Blackstone’s supply to amass the 7mn sq ft portfolio.

The deal comes at a time when shares in listed actual property corporations have slumped as rising rates of interest depress actual property values, creating alternatives for personal funds to snap up portfolios.

Industrials Reit mentioned it was “working intently” with Blackstone “to finish as quickly as is practicable”. 

The supply worth of 168p per share is equal to the corporate’s share worth final September earlier than a sell-off within the autumn. UK actual property funding trusts tracked by Numis are buying and selling at a mean low cost of 24 per cent to internet asset worth.

Reductions make it troublesome for corporations to situation fairness, whereas entry to debt has dried up within the face of market uncertainty.

“The fairness capital markets have shut while the sector struggles with the brand new rate of interest backdrop,” mentioned Miranda Cockburn, an analyst at Panmure Gordon. She mentioned it was “a pity” that Industrials Reit was leaving the listed sector however that the supply appeared “truthful”.

The corporate mentioned it deliberate to finalise the supply with Blackstone within the coming weeks. The deal, which incorporates about £200mn in debt, shall be topic to shareholder approval. The corporate was suggested by Eastdil Secured whereas Rothschild suggested Blackstone.

Industrials Reit, which is collectively listed in Johannesburg, specialises in “multi-let industrial” property comprising small models and warehouses, usually near metropolis centres the place logistics area is scarce.

Blackstone has invested closely in what is named “last-mile” warehouse area, which is rather more in demand due to on-line purchasing. Logistics property makes up 50 per cent of Blackstone’s €100bn European actual property portfolio, together with $30bn invested within the UK.

Blackstone took UK-listed St Modwen non-public for £1.2bn in 2021, securing the corporate’s substantial logistics growth and administration enterprise and land portfolio. The take-private of one of many UK’s dwindling variety of listed actual property autos was controversial on the time, with UK fund managers pushing for the next worth.