LondonMetric to acquire Urban Logistics REIT for €831m

UK REIT LondonMetric will acquire Urban Logistics REIT for approximately £699 mln (€831 mln) in a cash and stock deal.

Urban Logistics REIT warehouse

Urban Logistics shareholders will receive a combination of LondonMetric shares and cash, representing a 21.8% premium to Urban Logistics' pre-offer share price.
The merged entity will hold a £7.3 bn (€8.7 bn) portfolio with a market capitalization of £4.4 bn (€5.2 bn). Logistics properties will represent 55% of the combined portfolio, with 40% allocated to the faster-growing urban logistics sector.
The acquisition of Urban Logistics by LondonMetric will be carried out through a court-approved process and is anticipated to be finalized by the end of June.
Andrew Jones, CEO of LondonMetric, said: "This is an excellent transaction that grows our urban logistics platform and supports our triple net strategy. Urban warehousing remains our strongest conviction call for organic rental growth across the UK real estate market. The portfolio is well located, highly reversionary, and our asset management focus will ensure that it delivers reliable, repetitive, and growing income-led returns."
Nigel Rich, independent non-executive chairman of Urban Logistics, said: "Since its IPO in 2016, Urban Logistics has assembled an exceptional portfolio of single-let, 'last mile' assets and has outperformed the UK REIT sector and other relevant benchmarks. I would like to congratulate Richard Moffitt and the rest of the management team on this achievement and to thank them for their commitment and dedication.”
LondonMetric expects the acquisition to generate synergies, cost savings, and increased earnings within two years. The company also anticipates improved access to capital and lower financing costs due to its strong credit rating.
Urban Logistics shareholders will receive an upcoming dividend and will own approximately 11% of the combined company. The Urban Logistics board fully supports and has committed to the deal. Further details will be available around May 23rd.