Londonmetric mulls takeover of Alton Towers owner could ‘create one of the UK’s largest listed landlords’
Logistics landlord Londonmetric is understood to be in talks to buy LXi the owner of Alton Towers and Warwick Castle.
If completed, the deal would create a £6.4bn real estate group and the FTSE 250 landlord would acquire all outstanding shares in LXI, the Financial Times reported.
News of the deal comes as the UK’s commercial property sector has taken a hit due to rising business rates and a tough economic climate.
The outlet said that the Londonmetirc LXI deal would “create one of the UK’s largest listed landlords with a combined market capitalisation of £3.9bn”.
It comes as the landlord has been pivoting away from the logistics and retail park market.
Oli Creasey, property analyst at Quilter Cheviot, said: “REIT M&A has been something of a theme recently, and both LXi and LondonMetric have been some of the busiest in seeking ways to grow their portfolios. That said, we don’t see this as a slam-dunk deal. It would combine two quite different portfolios, and two very different management teams and structures.
“In other recent mergers of equals (Shaftesbury and Capco; LXi and Secure Income), it was obvious which the chief executive wanted to retire and which wanted to take the reins of the larger company. In this case, we wouldn’t want to speculate as to how the combined boards and execs would shake out.
He added: “The portfolio differences are not so much in the asset types, but the way they are managed. LMP is an active manager willing to rotate in and out of sectors and assets nimbly, whereas LXi is growing a reputation as a long-term holder through the property cycle.”
Londonmetric has performed well in recent months, with net rental income reaching £76.9m in the six months to 30th September, up from £72.1m in the same period last year.
Occupancy levels across its £3.2bn portfolio of logistics assets also remained strong, sitting at 99 per cent with a weighted average unexpired lease term of 11 years.
The firm was also supported by £157m worth of disposals including the sale of four offices and two long income assets for £24.5m back in November.
Morning Wire has contacted Londonmetric and LXi for a comment.