4 March 2025
If you are covering the latest news regarding a potential takeover attempt of Warehouse REIT, please see the following comment from Oli Creasey, head of property research at Quilter Cheviot:
"Following hot on the heels of KKR’s interest in Assura, Blackstone and Sixth Street Partners have put out an announcement this morning confirming that they have made a series of approaches to the board of Warehouse REIT, the latest of which was an offer of 110.5p per share to takeover the company. Warehouse REIT have yet to comment.
"The bid highlights the significant gap that exists between the company’s share price and the appraised value of the underlying properties. While the bid comes at a 34% premium to Friday’s close, it represents a 17% discount to the EPRA Net Disposal Value (NDV), the book value for the company that takes into account fair value of the debt book as well as the properties. That NDV was dated Sept-24 and given the recovery in industrial property values since then, it is likely that today’s NDV is slightly higher than this figure.
"Assura and Warehouse REIT are quite different companies, but both offers reflect similar circumstances – companies whose shares have drifted well below the underlying asset value. 2024 saw a raft of M&A deals in the REIT sector, and it looks as though 2025 will see more of the same, unless share prices rally to close the discount. WHR shares have reacted very positively this morning but are trading well below the 110.5p offer price, suggesting a relatively low outcome of success. That makes sense to us; the offer is indicative at present, and Blackstone & Sixth Street have until the end of March to make a formal offer. However, it also reflects the fact that not all investors will see the 110p price as compelling - with property values now increasing across almost all commercial sectors following a sharp fall in 2022-23, and the outlook for property returns to be positive, some shareholders will take the view that selling at a significant discount to NAV (which this represents) is not enough compensation."
