Buyers circle UKCM assets as Tritax merger completes

Buyers are already circling for UK Commercial Property REIT assets that don’t quite fit in the Tritax Big Box REIT portfolio. The merger of the two businesses completed today, with UKCM delisted and shares transferred to Tritax. Tritax Big Box chief executive Colin Godfrey said the business was already being approached about potential acquisitions from the combined portfolio. “The liquid nature of the non-strategic parts of the UKCM portfolio is reflected in the number of inbound enquiries we have received which will facilitate the accretive rotation of capital into the development of brand-new best-in-class logistics assets,” he said. Combined, the two businesses create the fourth largest UK REIT, with a value of £4.4bn. Alongside the expected disposals from UKCM’s portfolio, Godfrey said Tritax would “continue to take advantage of market conditions to selectively acquire mispriced assets”. The comments came as he updated the market on trading across the newly combined business. For Q1 2024, the group said take-up had slipped from 6.6m sq ft in Q1 2023 to 4.5m sq ft but there was an increase in space under offer to 14.2m sq ft, up from 11.1m sq ft at the end of 2023. “We are seeing an encouraging uptick in levels of activity in our development pipeline,” said Godfrey. “Many occupiers that deferred decision making in 2023 have moved forward in 2024 and we have 1.5m sq ft of new development transactions in legals, and a strong pipeline in negotiations. Through rent reviews, lettings and regears we are making good progress capturing the significant reversion within our investment portfolio. These factors together with stabilised yields collectively support our positive outlook for 2024.”