Why property M&A is all the rage

Two big deals could close this month that will shape an entire asset class

Hello Rainmakers,

Did you know that the property sector gets to network with itself every year in Cannes, at an event called MIPIM. Not content with that, they are descended on Leeds this week for a week of strategic conversations and debate (yeah, right).

M&A in the property sector is hotting up right now. Listed businesses Assura and Warehouse REIT are both under offer. Here’s what might happen.

Hot Property

In the lull before the financial crisis of 2008 an old friend of mine lamented that he not only wished he’d trained as a surveyor and a property agent instead of an accountant with a specialism for corporate finance, but that in his next life he was definitely “coming back as a property lad”.

The gist of it was that the property world was full of flamboyant entrepreneurs, while corporate Britain was getting uptight and a bit dull.

He also mentioned that restaurants in our big cities, like Piccolino, tended to be full of “all the property boys” on Friday, while he was still hunkered down in his office beavering away on a sale mandate for a business he had no realistic hope of selling.

They also got to go to Cannes for their annual networking and marketing soiree, MIPIM, always a source of great envy for other sectors who might get a trade show at the Excel in East London, if they’re lucky.

This week, the property crowd have been tearing it up in Leeds for UKREiiF, the real estate, infrastructure and investment exhibition and conference.

Networking at UKREiiF in Leeds

It won’t have escaped my friends' attention that a good time is being had by all. The sector is also being actively embraced by government to “build, build, build” and inducements to do so are aplenty.

As delegates tuck in to a roast and a Yorkshire pudding at the old Tetley’s brewery just off site, the talking points may well have turned to the influx of private equity money into UK real estate.

It won’t have escaped anyone’s attention that two chunky deals are currently on the block in the north of England, one in healthcare property, and the other in industrial sheds, with Blackstone close to completing the acquisition of Warehouse REIT.