Brookfield prepares bid for London-listed REIT Tritax EuroBox

  • Brookfield revealed that it was in the ‘early stages’ of evaluating a possible offer 
  • Tritax finalised the £924m takeover of UK Commercial Property REIT last month 

Tritax EuroBox has said it is yet to receive an acquisition proposal after Brookfield Asset Management announced it was preparing a bid for the portfolio.

Brookfield revealed on Monday it is in the ‘early stages’ of evaluating a possible offer for the London-listed real estate investment trust, which owns distribution centres across multiple European countries, such as Germany, Sweden and the Netherlands. 

Under City takeover rules, the Canadian firm, whose chair is former Bank of England governor Mark Carney, has until 5pm on 1 July to declare a ‘firm intention to make an offer’ or walk away.

Portfolio: Real estate investment trust Tritax Eurobox owns distribution centres across multiple European countries, such as Germany, Sweden, and the Netherlands

In response, Tritax told shareholders it has not received a bid from Brookfield and there was ‘no certainty’ the company would submit a proposal.

‘A further announcement will be made as appropriate,’ the company added. ‘In the meantime, shareholders are advised to take no action.’

Brookfield’s potential move for Tritax comes amid elevated merger and acquisition activity involving UK-based REITs.

Tritax itself completed its £924million takeover of UK Commercial Property REIT last month, thereby bolstering its portfolio of warehouses, shopping centres, and office buildings.

In addition, LondonMetric recently spent £1.9billion buying LXi, which held major interests in entertainment venues Thorpe Park and Alton Towers, as well as hotels and industrial parks.

Abrdn Property Income also agreed to merge with Custodian Property Income REIT, but the deal fell through after only 61 per cent of Abrdn shareholders voted in favour, below the 75 per cent threshold.

Many REITs have struggled in the past few years due to higher interest rates hitting real estate values and the rise of working from home depressing demand for office space.

Tritax Eurobox is currently trading at a discount of 21.2 per cent to its net asset value, according to data from the Association of Investment Companies. Peers in the AIC’s Property – Europe sector face an average discount to NAV of 26.1 per cent. 

Analysts from Peel Hunt said Brookfield’s potential cash offer for Tritax was ‘another sign of liquidity returning to markets, which bodes well for pricing.’

Tritax Eurobox shares were 1.3 per cent higher at 164.3p on early Tuesday afternoon but have flatlined over the last 12 months.