Tritax Big Box acquires £1.04 billion logistics portfolio from Blackstone

LONDON - Tritax Big Box REIT plc (BBOX) has exchanged contracts to acquire a £1.04 billion logistics portfolio from real estate funds advised by Blackstone Europe LLP, according to a press release statement issued Monday.

The transaction, expected to complete around October 22, involves 41 properties comprising 6.5 million square feet across 409 units throughout the UK. The portfolio consists of 32 urban logistics estates and nine big box assets, with 36% concentrated in the Southeast region.

The acquisition will be funded through a mix of £632 million in cash via a new debt facility and approximately £375 million in newly issued BBOX shares. Blackstone will receive shares priced at 161p each, representing a 13.5% premium to BBOX’s October 10 closing price, making Blackstone an 8.6% shareholder in the enlarged company.

The portfolio currently generates approximately £53 million in annual passing rent with 95% occupancy and a weighted average unexpired lease term of 5.9 years. BBOX identified a 28% rental reversion potential, with an estimated rental value of £67 million.

Santander Corporate & Investment Banking will provide a £650 million facility with an initial 12-month term and optional 18-month extension to fund the cash portion of the deal. Following the acquisition, BBOX’s loan-to-value ratio will increase to approximately 35%, with the company planning to undertake about £300 million in targeted disposals over the next 12-18 months to reduce leverage.

As part of the transaction, Blackstone will provide a £20 million rental reversion bridge spread over three years, which BBOX says will deliver a day-one running yield of approximately 6.0%.

The acquisition is expected to be mid-single digit earnings per share accretive in the first full year and increase BBOX’s gross asset value to £7.9 billion, according to the company statement.

Blackstone has agreed to a lock-up arrangement for the consideration shares until December 31, 2026, and a standstill arrangement until December 31, 2027, subject to certain exceptions.

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