Begrudgingly, I find myself writing about REIT M&A – yet again! After years of heightened activity, which has seen the universe shrink to 39 companies (excluding those in managed wind-downs) from 82 five years ago, I was hoping that I would be able to discuss some brighter topics.

But the first few weeks of 2026 has seen three more names potentially added to the list of real estate companies leaving the sector. Picton Property (PCTN) has put itself up for sale – citing the now very familiar battle with a persistent discount, Workspace Group (WKP) has been urged to sell up by Saba, and this week British Land (BLND) put Life Science REIT (LABS) out of its misery with a £150m recommended offer.

Add to that the highly acquisitive LondonMetric (LMP) building stakes in Schroder REIT (SREI) and Value & Indexed Property (VIP) at the back end of 2025 and the depleted REIT sector could soon number just 35 (some of which have obscure mandates around the world or are subscale).

Other corporate news this year also includes two trusts already in advanced wind-ups – Palace Capital and abrdn European Logistics Income – being requisitioned by their respective largest shareholders.

I have for a while had 2026 pencilled in as the year that things turnaround for the sector (and still have) after a solid 8.0% average share price total return in 2025. But will there be a worthwhile public sector left to invest in and gain exposure to this potential rally?

Yes, it is true that larger vehicles equal cost efficiencies, greater liquidity and earnings growth potential. But investors are also being robbed of a choice of investment options and talented fund managers.

Picton Property

The potential loss of PCTN, and its CEO Michael Morris, from the listed space will be huge. In early January, the company’s board put the company up for sale, giving up just as the outlook for the sector is as positive as it has been for the past four years.

Over the years, Morris has shifted PCTN’s diversified portfolio heavily towards industrial and logistics (67% by value) to take advantage of the positive fundamentals that are still at play in the sub-sector. It was the sub-sector that was hardest hit in 2022 when interest rates rose sharply, but is also the one with the greatest return potential. This, I think, will make the company attractive to a wide range of bidders – which may include the aforementioned LMP and also private equity.

Where public markets have not appreciated the returns on offer, ascribing the majority of property company shares wide discounts to NAV (with PCTN trading at around a 28% discount before the strategic review was launched), private equity (and LMP) very much has. Blackstone alone has taken out Warehouse REIT (WHR), Industrials REIT (MLI) and St Modwen (SMP) and built a stake in Tritax Big Box (BBOX) in recent years.

As mentioned, it will be a shame to lose PCTN and Morris, who has also done a good job with the company’s office portfolio through alternative use planning consents to maximise values.

Workspace

We are well aware of Saba’s attempts to take control of investment trusts, but its strategy with WKP is different, but very much as poorly thought out. Its open letter to WKP’s board demanding “an orderly strategic sale of its assets, systematic repayment of debt and the timely return of capital to shareholders” is all well and good in theory, but in practice will prove very difficult. Its proposed 12-month timeline proves its ignorance.

Selling all of WKP’s 64 properties, which are divided into nearly 5,000 individual units and let on short-term leases mainly to SMEs, will take a heck of a lot longer. Firstly, it is a disparate collection of converted warehouses around London, and secondly it is valued at £2.3bn.

You don’t have to look too far for evidence of this. WKP itself is £106m through a £200m disposal programme, which it has sensibly put a two-year timeline on. This is someway less than £2.3bn in 12 months.

WKP has yet to publicly respond to Saba, which owns 13.5% of the company, but seems to be giving its demands short shrift having since appointed a new CEO in serviced London office veteran Charlie Green to take on the baton and lead its turnaround strategy. Green co-founded and ran The Office Group, which was acquired by Blackstone in 2017 for $640m.

Life Science REIT

In the latest corporate activity, BLND this week announced it was acquiring LABS for £150m – bringing an end to a torrid four-and-a-bit years.

LABS was in many regards a victim of timing, launching right at the top of the market raising £350m in an IPO in November 2021 from institutional investors. 

Back then, both the property market and the life science sector were worlds apart from where they are today. COVID was still prominent and drug discovery and related sectors were rightly being championed. A flood of venture capital investment into the sector would mean a rush of new lab space requirements.

The spike in inflation and interest rates meant that property valuations plummeted almost as soon as LABS had assembled its portfolio. Furthermore, the leasing market slowed as venture capital dried up.

Its failure to convert traditional office space into more lucrative lab space meant that it was effectively an office REIT in all but name. BLND’s offer, although a 26% discount to NAV, will come as some respite for much-suffering LABS shareholders. It will also give them exposure to BLND’s diverse portfolio, which includes a growing collection of life science properties as well as the London office campuses and UK retail parks.

Cutting costs and targeting letting up vacant space will result in earnings accretion, which should be music to LABS shareholders’ ears.

What is less pleasant listening is the slow demise of the UK REIT sector, which will continue to be susceptible to further consolidation if discounts remain wide.