13 October 2025
If you are covering the news of Blackstone’s proposed acquisition of Big Yellow Group, the UK self-storage REIT, or its sale of logistics assets to Tritax Big Box, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“It's been a busy October already for Blackstone in Europe, and we aren't even halfway. Having closed out the acquisition of Warehouse REIT late last week, the parent company has kept its foot on the gas with two new transactions announced this morning - we understand that each is being undertaken via different investment vehicles.
“The first is the proposed acquisition of Big Yellow Group, the UK self-storage REIT. The proposal is at early stages, but both parties have confirmed the news. Big Yellow shares have rallied around 20% this morning on the back of the possible bid, and close peer Safestore has also benefitted (up 12%) from the interest in the self-storage sector, despite not being named as a bid target itself.
“The possible bid is not hugely surprising. With approximately £4.5bn of takeovers and mergers already in 2025 year to date, it is clear that 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 that 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?
“The other transaction is in the other direction, with Blackstone selling £1bn of logistics assets to Tritax Big Box. We note that Tritax were the underbidder in the aforementioned Warehouse REIT purchase, though we would hope and expect that this transaction is unrelated. Tritax will fund the purchase with a combination of debt and new equity issued to Blackstone, at a 13.5% premium to last week's close price. While the share issue price of 161p is above Friday's close price, it is also well below Tritax's recently reported NAV of 194p. Issuing shares that far below NAV is not standard practice for REITs, and while the price being above the prevailing share price improves the deal for shareholders, we estimate that it will dilute the company's NAV per share by around 3p.
“Tritax shares have reacted positively to the news, but are only modestly outperforming the wider sectors, which is perhaps seeing renewed interest following the Big Yellow announcement.”
