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The Canadian asset manager outbid Segro, the listed warehouse landlord, in a race to acquire Tritax EuroBox last month. The two groups on Tuesday announced a non-binding agreement for Brookfield to sell about 30 per cent of Tritax EuroBox’s portfolio to Segro for about €470mn after it acquires the company.
Segro said it would not make another bid for Tritax EuroBox, in effect ending the takeover battle. Tritax EuroBox’s board said it still unanimously supported Brookfield’s offer.
The transaction marks the latest in a series of deals in the commercial property market, which is emerging from a two-year slump brought on by high interest rates, which hit asset values and hampered investment.
Smaller listed landlords have faced pressure to sell up or consolidate to weather that downturn.
Activity has started to pick up in recent months, with strong demand from the ecommerce industry boosting the appeal of logistics warehouses to investors.
The industrials property sector, which includes warehouses, has seen a 12 per cent increase in deal volume this year — with a particular increase since the summer — according to MSCI.
Keith Dowley, a founder and managing partner of DTRE, a real estate adviser with a speciality in logistics said: “Activity is picking up, signalling more transactions ahead as conviction capital continues to see value in commercial property and the [net asset value] discounts across the listed sector.”
US private capital groups have recently snapped up a series of large portfolios. Starwood in September agreed the £673.5mn acquisition of Balanced Commercial Property Trust, formerly managed by Columbia Threadneedle, which includes big warehouse holdings — as well as the trophy St Christopher’s Place portfolio in central London.
In the same month, Blackstone struck a €1bn deal to buy an 80 per cent stake in a European logistics portfolio from Johannesburg-listed landlord Burstone. Lone Star meanwhile acquired a portfolio dubbed “Project Tiger” from family-owned property group Charles Street Buildings in October.
Brookfield emerged last month as the winning bidder to acquire Tritax EuroBox, which has a portfolio valued at approximately €1.5bn. The investment group agreed to pay 69p a share in cash, which it said was a 6 per cent premium to Segro’s all-share offer.
Brookfield said at the time it would ultimately look to sell 20-30 per cent of the portfolio.
The Canadian group has been putting together a logistics business in Europe since 2018, and has invested €1bn over the past 18 months — mostly in smaller deals.
Brookfield’s offer is subject to approval by Tritax Eurobox shareholders later this month.
