Tritax Big Box to buy portfolio of logistics assets from Blackstone for £1.04bn

(Sharecast News) - Tritax Big Box REIT said on Monday that it has exchanged contracts to buy a "high-quality" portfolio of logistics assets valued at just £1.04bn from US private equity firm Blackstone. The consideration for the acquisition - which is expected to complete on or around 22 October - is £632m in cash and up to 233.1m or around £375m of new ordinary shares at 161p each.

The price represents a premium of about 13.5% to the closing Tritax price on Friday.

Tritax said it was buying an "exceptional portfolio of high-quality, well-located assets with significant near-term rental reversion potential".

"The acquisition adds a high quality, well located urban logistics weighted portfolio of scale with rental reversion potential of circa 28%," it said.

Chief executive Colin Godfrey said: "These assets have been carefully acquired over several years to create a portfolio notable for its quality and scale, and which would be difficult to replicate through piecemeal acquisition strategy. The shorter-dated last mile and urban leases provide an accelerated pathway to capturing this significant rental reversion and are complemented by modern, high specification big box assets generating significant and resilient income.

"Aligned with our strategic objectives, this exceptional portfolio offers strong rental reversion and numerous asset management opportunities. It also significantly broadens our client proposition across key urban logistics markets and reinforces our leading position in mission critical big boxes; in combination growing our GAV to over £7.9 billion.

"The acquisition also delivers immediate financial benefits, including mid-single-digit EPS accretion and enhanced returns well above our cost of capital. I welcome Blackstone as a new 8.6% shareholder in Tritax Big Box; their investment at a material share price premium demonstrates confidence in our team, our leading position in UK logistics, the strong attributes of the transaction and positive outlook for both our business and the market."

At 0850 BST, the shares were up 3.2% at 146.40p.

Russ Mould, investment director at AJ Bell, said: "Having fought on the battlefield over the acquisition of Warehouse REIT, Tritax Big Box REIT and Blackstone are now getting into bed together.

"Blackstone won the fight for Warehouse REIT, and it is now doing a deal to sell certain property assets to Tritax in exchange for cash and a stake in the company.

"Tritax further increases its exposure to the UK commercial property space and gets a shareholder with very deep pockets.

"Blackstone gets its foot in the door with Tritax and would benefit as an investor from its success, as well as being close should the two companies seek to co-invest on projects in the future.

"Blackstone clearly has a strong appetite for UK property as it also confirmed takeover interest in self-storage group Big Yellow. A lot is riding on the Budget as to whether Blackstone will make a formal bid, but throwing its hat into the ring now means it can act fast should Rachel Reeves not announce anything that dampens the appeal of the sector."