Blackstone raises bid for Warehouse Reit as property dealmaking heats up | USAEMALL.com

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Blackstone has made a final £489mn bid to acquire listed landlord Warehouse Reit, in private equity’s latest swoop on the commercial property sector following a brutal downturn.

The US group, which is the world’s largest commercial property investor, has made four previous offers alongside private equity firm Sixth Street — which were all rejected by Warehouse Reit.

Sixth Street said in a statement on Tuesday that it was dropping out of the pursuit of the company, which owns warehouses in industrial hubs around the UK. But Blackstone has raised its all-cash offer to acquire Warehouse Reit for 115p per share, valuing the company at £489mn — up from its £470mn approach in February.

Warehouse Reit’s board said the February offer “materially undervalues [the company] and its assets”.

Blackstone said its final terms provided “a highly deliverable and compelling alternative to shareholders” — and represented a premium of nearly 40 per cent to the share price on the last day before the takeover process became public.

Its raised bid comes as US private capital groups have been snapping up portfolios across Europe since last autumn, to take advantage of what investors expect to be the bottom of the commercial property market.

Real estate values have plunged since 2022, as higher interest rates hit asset values and hampered investment. European industrial and logistics properties have fallen by roughly a fifth from their peak values, according to analysts at Green Street.

Listed landlords have also been trading at substantial discounts to the value of their assets, with smaller players under increasing pressure to sell up or consolidate.

Brookfield in October won a battle to take private Tritax EuroBox, and later agreed to sell about 30 per cent of its portfolio of warehouses to rival bidder Segro.

A month before, Blackstone struck a €1bn deal to buy an 80 per cent stake in a European logistics portfolio from Johannesburg-listed landlord Burstone. Meanwhile, US investors Lone Star and Starwood each bought a large logistics portfolio in the autumn, from Balanced Commercial Property Trust and family-owned group Charles Street Buildings.

Blackstone last year announced it was merging its logistics portfolios from two previous acquisitions — St Modwens and Industrials Reit — into a new business called Indurent, which is now one of the UK’s largest logistics players.

Under UK takeover rules, the US firm has until Monday to make a firm offer for Warehouse Reit.