Listed real estate in the UK could be subject to more public-to-public mergers and acquisitions, according to analysts at investment bank Peel Hunt, who said it should lead to a “larger, more liquid sector”.
James Carswell and Matthew Saperia said in a note that Helical, Empiric Student Property, GPE, Derwent London and Grainger could all become targets for deals, based on factors such as their portfolios, debt metrics and discounts to NAV.
Although the 18 listed real estate M&A deals from the past four years have skewed to cash offers from buyers such as private equity firms, five of the past nine transactions have been public-to-public. These include the mergers of Shaftesbury and Capital & Counties, and LXi REIT and Secure Income REIT.
