UK Property - comment

Blackstone has agreed to a cash offer for Industrial REIT Limited for c.£500m, which although a premium of c.40% to current trading levels, is a small discount to the most recent NAV of March 2022. Industrial REIT is a portfolio of UK warehouses, the majority in the North West or Yorkshire, with minimal exposure to the South East (7%). Industrial capital value has seen a decline of c.20% from June to November 2022, due to the rising interest rate environment. Yields have softened from low 5% to mid 6’s.

Despite this, it is worthy of note that private equity has stepped into this market with Blackstone making this recommended offer for Industrial REIT. The bid reinforces the market view that there is strong occupational demand from investors for industrial investment which has provided continued liquidity even as yields increase.