Aberdeen Standard Investments has acquired a 60% stake in £5.1bn real estate investment trust manager Tritax as it seeks to “evolve” its property offering.
Logistics specialist Tritax is known to UK investors for its £3.7bn Tritax Big Box Reit and £549.6m Tritax Eurobox investment trust.
Tritax’s teams will continue to run the closed-ended funds plus their other existing mandates, retaining their investment decision making autonomy and control, a press release said. Tritax management will lead ASI Real Estate’s global logistics team.
Quoted Data property analyst Richard Williams said the deal could lead the to the merger of Aberdeen Standard European Logistics Income and Tritax Eurobox. The former focuses on mid-box lot sizes while the latter focuses on bigger facilities.
“Both companies are desperately looking to scale up in a sector that is burgeoning due to increased online retailing. Merging would help to diversify the two portfolios and create a European logistics powerhouse with scale,” Williams said.
“Aside from the two funds, the deal is a clear indication of the appeal of the logistics sector,” he added.
ASI says property franchise needs to evolve
ASI global head of real estate and deputy head of private markets Neil Slater (pictured) said the asset manager is committed to evolving its real estate offering “to ensure it develops with changing industry dynamics and client needs”.
Tritax Big Box Reit and Tritax Eurobox have both delivered positive returns during a challenging year for property funds, particularly open-ended funds that were forced to suspend in March due to valuation uncertainty related to the coronavirus.
Tritax Big box has delivered 6.5% for shareholders in the year to date, while Tritax Eurobox has returned 7.9%, according to FE Fundinfo. In contrast, the average constituent of the Investment Association UK Direct Property sector has fallen 4.1% in the year to date.
With ASI’s open-ended property stable, the £1.6bn Standard Life Investments UK Real Estate fund and £974m Aberdeen UK Property fund both reopened to redemptions in mid November.
See also: £5bn worth of UK property funds remain suspended despite clarity on valuations
New Standard Life Aberdeen boss sees real estate franchise as a ‘differentiator’
Standard Life Aberdeen’s new chief executive Stephen Bird said private markets, and particularly real estate, would be a “differentiator” for the business. Bird said the transaction enhanced the existing ASI real estate franchise in an area of the market benefiting from accelerating trends.
ASI’s real estate team runs £37bn of assets across UK, Europe and Asia with a team of 270 investment professionals based across 19 offices.
Slater added: “Logistics is, and will remain, one of the most attractive income and capital growth sectors within real estate over the long term.
“The ongoing impact of technological developments, the effect on supply chain management and, ultimately, the increasing customer demand for control over the delivery of goods and services makes this transaction a scalable and exciting opportunity.”
The transaction is expected to close in early 2021.
See also: FCA notice period proposals could be the ‘death knell’ for retail property funds
