Blackstone Inc. agreed to purchase UK landlord Industrials REIT Ltd., the private equity giant’s latest bet on urban warehouses in Europe.
(Bloomberg) — Blackstone Inc. agreed to purchase UK landlord Industrials REIT Ltd., the private equity giant’s latest bet on urban warehouses in Europe.
New York-based Blackstone offered to pay 168 pence a share in cash, according to a statement Monday, giving the London firm an enterprise value of about £700 million ($860 million).
The offer, which will be recommended by Industrials REIT’s board, represents a 42.4% premium to the landlord’s closing share price on Friday.
Blackstone has remained committed to European warehouses even after a series of interest rate increases began to weigh on real estate values, hitting hardest those sectors like industrial property where prices had soared furthest. That’s because the firm is convinced that rising rents will offset the impact of higher borrowing costs.
The take-private deal, expected to complete in July, would be the third such transaction involving a UK industrial landlord by Blackstone in four years. The PE firm bought Hansteen Holdings Ltd. and St Modwen Properties Ltd. in 2019 and 2021, respectively, as it continues to bet that demand for space in warehouses close to population centers will remain red hot, forcing rents higher.
While the deal represents a premium to Industrials REIT’s recent share price, which is down almost 10% this year, it’s still a discount of about 13.6% from a year earlier.
Blackstone intends to make a firm offer by April 14 and Industrials REIT’s executives have committed to sell the roughly 6.3% of the company’s shares they own.
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