Picton Property Income (PCTN) rallied nearly 6% after the UK real estate investment trust said LondonMetric Property (LMP) had taken an interest in the strategic review and sale process it began last month.

Shares in the £452m REIT rose 4.7p, or 5.6%, to 87.8p as the company said it looked forward to progressing discussions with all interested parties.

However, it clarified that LondonMetric, an acquisitive company that has hoovered up CT Property Trust, LXi REIT and Urban Logistics in the past three years, had not made an offer for Picton.

LondonMetric had raised speculation about its next move last year after buying stakes in Schroder Real Estate (SREI) and Value and Indexed Property Income (VIP) which it lifted to 11% and 9% respectively.

The latest spike is good news for QuotedData analyst Richard Williams who picked Picton as his New Year tip and has seen the shares advance from 73.5p since the start of the year. He identified LMP as a potential bidder, along with Tritax Big Box (BBOX), when Picton put itself up for sale on 13 January. Just over two thirds (67%) of the portfolio is invested in industrial properties, where rental growth is currently highest, making it an attractive target for both logistics funds.

While Picton chair Francis Salway said the company had delivered upper quartile performance since launch in 2005, the persistent 24% share price discount required it to be “proactive” in safeguarding shareholders. Even after the 20% rise in the shares this year, their price remains 24% below their net asset value per share of 102.4p in September. Last week in an investor presentation, the company said its net disposal value per share after the repayment of £208.4m of debt was 106p.

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