Tritax Big Box would buy UK Commercial Property (UKCP) to create UK's fourth largest REIT in a deal valuing its smaller rival at about €1.1b.
Under the terms of the deal, each UKCP shareholder will be entitled to 0.444 new Tritax shares for each UKCP share.
UKCP directors intend to unanimously recommend that shareholders vote in favour of the deal at the firm's general meeting, the company said in a joint statement.
“UK Commercial Property has assembled a high-quality logistics-oriented portfolio with a South-East and Midlands focus and significant embedded rental reversion potential, all characteristics which are complementary to Tritax Big Box's current portfolio. The combination grows Tritax Big Box's exposure to "last mile" and urban logistics assets which have the potential to enhance returns of the existing portfolio. This combination represents a continuation of the highly successful strategy that Tritax Big Boxhas delivered since initial public offering and which over recent years has included acquiring selected 'last mile' and urban logistics assets," said Tritax Big Box Chair Aubrey Adams.
UK Commercial Property Senior Independent Director Margaret Littlejohns commented: "The UK Commercial Property recommending directors believe this transaction allows all UK Commercial Property shareholders to benefit from continued investment in a REIT, but with significantly larger scale and improved share liquidity, as well as addressing the factors we believe have contributed to the persistent discount at which UK Commercial Property's shares have traded for many years. By combining the businesses on an EPRA NTA-to-EPRA NTA basis, shareholders will be able to share fully in the future potential valuation upside whether that is delivered from asset management initiatives, rental growth, the potential of the Tritax Big Box development pipeline or a broader improvement in real estate sector sentiment. These factors together with the compelling strategic and financial rationale of the transaction lead us to recommend this deal to all shareholders."
The combination scheme is expected to become effective in May, subject to the satisfaction or waiver of conditions.
Image source - Pexels.
Europe Real Estate — an overview of real estate developments in European countries.
