Blackstone takes 9% of Tritax Big Box as part of £1bn portfolio trade

Blackstone is selling a £1bn (€1.1bn) UK logistics portfolio to Tritax Big Box REIT (BBOX) in a deal that will result in Blackstone owning a 9% stake in the listed logistics warehouse company.

London-listed BBOX said it expects to fund the acquisition via a new £650m debt facility providing £632m in cash and will also issue £3752m in new shares at 161p per share, representing a premium of 13.5% to BBOX’s last closing price.

The newly acquired 6.5m sqft portfolio, which is 95% occupied and located across the South East and the Midlands, is expected to increase BBOX’s gross asset value (GAV) to £7.86bn.

Over the next 12-18 months, the company intends to undertake select targeted disposals amounting to approximately £300 million

Colin Godfrey, BBOX CEO, said: “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 £7.9bn.”

Godfrey said the acquisition also delivers immediate financial benefits, including mid-single-digit earnings per share accretion and “enhanced returns well above our cost of capital”.

The deal marks a shift in relationship as Blackstone had spent much of the year battling to acquire Warehouse REIT, ultimately outbidding BBOX for the London-listed firm just last month.

James Seppala, chairman of Blackstone Europe and the head of real estate Europe, said: “This transaction reflects our conviction in BBOX and its market-leading position, as well as our continued conviction in the UK logistics sector. This portfolio represents a rare aggregation of high-quality properties with meaningful embedded rental growth potential.

“The Tritax team’s strong asset management track record make them an excellent steward for these assets in the future. Our decision to take an ownership stake in BBOX as part of this transaction reflects our belief in the company’s long-term strategy and outlook, and we are excited by the opportunity to participate in the future success of the enlarged business.”

Blackstone weighs cash offer for UK self storage firm Big Yellow

Responding to media speculation, Blackstone confirmed it is considering its position in the UK self-storage firm Big Yellow, a move that could potentially lead to a cash offer for the company’s entire share capital.

In response, London-listed Big Yellow also disclosed it has met with a few parties regarding a potential sale but noted that, as of the announcement, it is not in receipt of a formal approach or currently in sale discussions.

In mid-morning trading, Big Yellow shares traded 20% higher, valuing the company at £2.29bn.

To read the latest IPE Real Assets magazine click here.