London-listed REIT Tritax Big Box has purchased a £1bn logistics portfolio from Blackstone, while the private equity giant announced it is considering a bid for Big Yellow Group.
The Tritax transaction includes 32 urban logistics and five big box assets across the South East and the Midlands. Tritax will pay £632m in cash for the assets, while Blackstone will also receive up to £375m of new ordinary shares in the REIT.
The shares will be issued at a 13.5% premium to Tritax’s closing price of 141.9p at the end of last week. However, it is below Tritax’s NAV of 194p per share.
James Seppala, chair of Blackstone Europe and head of real estate Europe, said: “This transaction reflects our conviction in Tritax Big Box and its market-leading position, as well as our continued conviction in the UK logistics sector. This portfolio represents a rare aggregation of high-quality properties with meaningful embedded rental growth potential.
“Our decision to take an ownership stake in Tritax Big Box as part of this transaction reflects our belief in the company’s long-term strategy and outlook, and we are excited by the opportunity to participate in the future success of the enlarged business,” he added.
Reaction
The deal comes after Tritax Big Box lost out to Blackstone in a bidding war for Warehouse REIT. Having missed out on that acquisition, QuotedData property analyst Richard Williams said this morning’s announcement to be a better deal for Tritax Big Box.
“The shares are being issued at a discount to net asset value of around 16.3%, which looks high but can be justified by earnings accretion – mid-single digits in the first year helped by the reversion bridge and meaningful future earnings growth thereafter with a potential rental reversion of 28%, most of which is set to be captured by 2028,” he said.
“The deal also cements Tritax Big Box as one of the largest logistics landlords in the UK and further increases its exposure to the smaller end of the logistics sector, spreading risk and returns away from large, single-let warehouses.”
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Big Yellow
In a busy morning for the private equity giant, Blackstone Europe also confirmed it is considering a bid for self-storage REIT Big Yellow Group.
However, a stock exchange announcement noted discussions are at a preliminary stage, with Blackstone weighing up the potential impact of the upcoming UK budget as it relates to the self-storage sector.
Big Yellow shares have jumped 18.9% this morning on the back of the potential offer.
“Blackstone clearly has a strong appetite for UK property as it also confirmed takeover interest in self-storage group Big Yellow,” said Russ Mould, investment director at AJ Bell.
“A lot is riding on the Budget as to whether Blackstone will make a formal bid, but throwing its hat into the ring now means it can act fast should Rachel Reeves not announce anything that dampens the appeal of the sector.”
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“The possible bid is not hugely surprising,” added Quilter Cheviot head of property research Oli Creasey.
He noted with approximately £4.5bn of takeovers and mergers already in 2025 year to date, it is clear private bidders see considerable value in UK REITs, the vast majority of which are trading at values well below those of the underlying assets.
“What is slightly unusual is Big Yellow is a highly operational business, with a relatively large number of ‘on-the-ground’ employees in the various locations, and relatively frequent interactions with a large number of small tenants.
“Up until now, the majority of private equity interest has been in companies with traditional commercial leases – entire buildings let to a single tenant for years at a time. Big Yellow is a different type of real estate business, however, it is also one with a well-built and scalable operating platform that a buyer might see additional value in.
“If Blackstone can swallow Big Yellow, we question whether any UK REIT is too big or too complex to be a target?”
