18 December 2023
If you are covering reports that British landlord LondonMetric Property is in talks to merge with real estate investment trust LXI, please see comment below from Oli Creasey, property analyst at Quilter Cheviot:
“REIT M&A has been something of a theme recently, and both LXi and LondonMetric have been some of the busiest in seeking ways to grow their portfolios. That said, we don’t see this as a slam-dunk deal. It would combine two quite different portfolios, and two very different management teams and structures.
“In other recent mergers of equals (Shaftesbury and Capco; LXi and Secure Income), it was obvious which CEO wanted to retire and which wanted to take the reins of the larger company. In this case we wouldn’t want to speculate as to how the combined boards and execs would shake out. The portfolio differences are not so much in the asset types, but the way they are managed. LMP is an active manager willing to rotate in and out of sectors and assets nimbly, whereas LXi is growing a reputation as a long-term holder through the property cycle.
“We note that the share price reaction is limited so far and we suggest that there is no guarantee of a successful merger resulting from this.”
