British Land has agreed terms to buy Life Science REIT in a deal worth £150m.
The cash-and-shares deal was announced to the London Stock Exchange by both parties this morning (28 January). If approved, Life Science REIT shareholders will receive 14.1p in cash and 0.07 British Land shares for each share they hold in the real estate trust.
The deal represents a 21% premium on Life Science REIT’s closing price last night of 35.4p. However, it also comes at a c.26% discount to the trust’s unaudited net tangible assets recorded at the end of 2025.
British Land’s offer for the trust follows a strategic review undertaken last year after a sustained period of poor performance and a wide discount, with Life Science REIT previously announcing a managed wind-down last year.
Since its IPO in November 2021, Life Science REIT has struggled amid higher inflation and elevated interest rates. The macroeconomic environment has had a knock-on effect on leasing activity and negatively impacted the sentiment towards both the life science and wider UK real estate sector.
“This has been a significant challenge for Life Science REIT in allowing it to support its capital expenditure initiatives and commitments for certain assets within the portfolio, which aimed to increase the life science sector focus and drive increased rents,” the board said.
According to AIC data, Life Science REIT shares trade at a 46.85% discount. In share price terms, the trust is down 42% over the last three years.
Claire Boyle, chair of Life Science REIT, added: “Having previously announced that it would pursue a managed wind-down, the Life Science REIT Board now believes that the acquisition will provide a superior outcome for Life Science REIT shareholders, delivering greater and more immediate value, as well as the option to remain invested in the sector longer term under the umbrella of a larger and more diversified company whilst removing the uncertainty, market risk, illiquidity and frictional costs associated with a managed wind-down of the portfolio.”
See also: AIC’s five most-viewed investment trusts of 2025
REIT M&A
The deal for Life Science REIT is the latest in a string of bids in the UK REIT sector over the past three years as private equity and trade buyers take advantage of the discounts on offer in the space.
“Perhaps someone, somewhere thinks UK property stocks are simply too cheap,” said AJ Bell investment director Russ Mould. “After all, the average 23% discount to historic book value across the sector compares to the average 11.7% discount implied by the takeover price across the 13 bids for REITs in the past three years.”
“Many REITs also come with a juicy dividend yield, thanks to the rental income they generate, and the requirement to pay out at least 90% of property rental profits to maintain REIT status,” he added.
“It is therefore easy to see why REITs might attract the attention of private equity or trade buyers, given the combination of cashflow from rents, asset backing and lowly valuations.
“The lofty dividend yields may also catch the eye, especially if the Bank of England base rate continues to come down, and any further clarity regarding the trajectory of UK economic growth could, too, especially as it may not take too much to surprise on the upside here.”
Recent REIT bids
