(Bloomberg) -- Segro Plc agreed to buy €470 million ($500 million) worth of Tritax EuroBox Plc’s property portfolio following the latter’s takeover by Brookfield Asset Management.
The portfolio represents about 31% of the gross value of Tritax’s total holdings of €1.5 billion, London-based warehouse landlord Tritax said in a statement on Tuesday.
The consideration will be paid in cash and the actual price will reflect any minority interests, Segro said in a separate statement. The portfolio generates about €23 million of headline rent, resulting in a blended net initial yield of 4.7%, according to the statement.
Brookfield edged ahead of Segro last month in the battle to buy Tritax with a recommended cash offer that valued the company at £557 million ($714 million). Since Segro has confirmed that it won’t raise its bid, the Tritax board expects the Brookfield offer to proceed, according to the statements.
Shares of Tritax fell as much as 2.3% in early London trading on Tuesday. Segro was little changed.
The Tritax deals come amid expectations that warehouse values could bounce back, led by prospects of further rate cuts and rising rents. At the same time a push for scale has led to a slew of consolidation among publicly traded property companies.
Many smaller vehicles like Tritax EuroBox have consistently traded at a discount to their reported net asset values despite investing in sought-after sectors and therefore limiting their ability to raise further capital. That’s encouraged private equity firms including Blackstone Inc. and Brookfield to launch a series of take-private deals for warehouse owners.
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