Blackstone targets Warehouse REIT for £470m takeover
Warehouse REIT’s stock price has jumped almost 18 per cent after it was revealed the investment trust had rejected four separate bids for a takeover from US private equity giant Blackstone.
Blackstone, as part of a consortium with investment giant Sixth Street, made a £470m offer for the investment trust last week, it announced today.
The private equity house added that the trust’s board rejected the offer, which was a substantial discount to the underlying value of the portfolio’s assets.
“While the bid comes at a 34 per cent premium to Friday’s close, it represents a 17 per cent discount to the EPRA Net Disposal Value, the book value for the company that takes into account fair value of the debt book as well as the properties,” noted Oli Creasey, head of property research at Quilter Cheviot.
Warehouse REIT’s share price has consistently traded more than 10 per cent below the value of the assets in its portfolio for the last three years, sitting on as much as a 33 per cent discount for the last year.
Richard Williams, property analyst at Quoteddata, described the bid as “very opportunistic” due to the wide discount that has plagued the trust in recent years.
“The board of Warehouse REIT should be commended for rebuffing it,” he added.
While the trust’s shares did jump on the news, they are still trading well below Blackstone’s offer price.
The news follows FTSE 250 healthcare real estate trust Assura’s rejection of KKR’s £1.5bn offer for its portfolio last month.
“Assura and Warehouse REIT are quite different companies, but both offers reflect similar circumstances – companies whose shares have drifted well below the underlying asset value,” said Creasey.
In addition, Blackstone bought out both Warehouse REIT competitors St Modwen and Industrials REIT in 2021 and 2023 respectively, combining them last year along with assets acquired through 25 other deals.
Thanks to the wide discounts in share prices across all trusts, 2024 saw a raft of M&A deals in the REIT sector.
Sales included LXI REIT, which was bought out by Londonmetric Property, UK Commercial Property REIT (merged with Tritax Big Box), Balanced Commercial Property Trust, and Tritax EuroBox.
Warehouse REIT itself was highlighted as a potential takeover target during 2025 by Deutsche Numis, as despite a wide discount, the trust’s sector of multi-let industrial is undergoing a “long-term resurgence”.
“Property companies are open to these opportunistic bids due to the wide discounts to NAV that they have traded on since mid-2022 when interest rates started to rise,” explained Williams.
“Despite many takeovers at substantial premiums to share prices, there has been little share price reaction and read across to other companies and until that happens the sector will continue to be targeted by private equity companies that do recognise the value on offer.”