US developer CBRE Group has moved into the UK build-to-rent (BTR) sector with the acquisition of Telford Homes for £267.4m (€297m).
CBRE, through its real estate development business Trammell Crow Company, is offering to pay Telford shareholders £3.50 for each share, representing an 11.1% premium to the share’s last closing price.
CBRE said the acquisition positions Trammell to ”opportunistically expand” its development platform over time in the UK and Europe.
Established in 2000, AIM-listed Telford currently has a development in-process portfolio of about £1.32bn.
Andrew Wiseman, chairman of Telford Homes, said the offer from CBRE represents fair value for shareholders in light of Telford Homes’ market positioning, the current operating environment and the underlying value of Telford Homes’ site portfolio and pipeline.
“The board remains confident in the long-term prospects of the business, however the board also recognises the risks posed by the political and macro-economic environment, as well as the already stated impact on the group’s short- and medium-term profitability from the implementation of its new build to rent strategy, which is lower margin in nature” Wiseman said.
Bob Sulentic, president and chief executive officer of CBRE, said: “The UK is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the US over the last two decades.
“Telford is well positioned to lead this trend, and their more than 300 talented professionals operating in London are a great addition to our company.”
The acquisition of Telford also positions Trammell to opportunistically expand its development platform over time in the UK and Europe, CBRE said.