Warehouse REIT and Blackstone have agreed the terms of a recommended cash acquisition of Warehouse by the US private equity giant.

Under the deal, shareholders would get 110.6p per share, including the 1.6p dividend paid in April.

Blackstone had previously submitted a cash proposal of 115p per share in March, but following due diligence raised concerns over asset valuations – specifically regarding Warehouse REIT’s development at Radway Green.

The revised proposal, which values Warehouse at £470m, was considered by a committee of independent directors which has now recommended the firm offer from Blackstone.

The revised offer is a 34.2% premium to the closing price per Warehouse share of 82.4p on 28 February 2025 (the last business day prior to the commencement of the offer period), but a 13.4% discount to its NAV of 128.0p at 31 March 2025.

A court meeting and general meeting will be convened (expected to be held in July) where the deal requires at least 75% of shareholders votes to be approved. If approved, the deal is expected to become effective during the final quarter of 2025.

Comments

Neil Kirton, the chair of Warehouse, said: “Warehouse has, since its IPO in 2017, delivered strong operational performance that demonstrates the quality of our portfolio and our locations, and the resilience of the multi-let industrial market. Warehouse has grown from an initial seed portfolio of 27 freehold and long leasehold warehouse assets, to a diversified asset portfolio valued at £805.4m, achieving a total annualised accounting return of 7.7% since IPO. Despite this success, the Company’s growth has been constrained by the weak macroeconomic backdrop, high interest rates, and an inability to raise new equity.

“The Warehouse Independent Directors therefore, following careful consideration and reflecting on the uncertain macroeconomic backdrop, believe that the cash offer from Blackstone provides shareholders the opportunity to receive cash at an attractive premium of 34.2% to the undisturbed price. As a result, the Warehouse Independent Directors have concluded that the Acquisition is in the best interests of Warehouse Shareholders and Warehouse as a whole.”

James Seppala, head of Blackstone Real Estate Europe, said: “As one of the largest investors in logistics, we have a high conviction in the demand drivers supporting this sector across the UK. We believe the strength of our UK platform, our management teams, their operational capabilities and our capital will help Warehouse capitalize on the opportunities ahead.

“Blackstone has been investing in the UK for over 20 years and over this period we have deployed over £35bn, supporting businesses that employ over 40,000 people. This acquisition builds on this momentum and reinforces our long-term commitment to the UK.”