Life Science REIT has launched a strategic review that could see it sold or wound down, with several buyers already showing interest in buying the company.
The company said in a stock exchange announcement that the review, led by Panmure Liberum, would “explore all strategic options available to maximise value for shareholders”.
The company was established and listed in 2021 as the UK’s only public REIT focused on the life science sector. It has since invested all the proceeds of that float in assets across Cambridge, Oxford and London.
But it now said it faces “challenges and significant headwinds” that include high inflation and interest rates. Those have led to a slowdown in leasing, it added.
The company’s size and liquidity has also held back its share price, the REIT said, and has meant its stock has traded at a “significant” discount to asset value. It has now suspended dividend payments.
As of the end of 2024, unaudited EPRA net tangible assets stood at £260.4m or 74.4 pence per share. It’s shares closed on Thursday at 38.8p, a discount of almost 50%.
“Despite signs of improving confidence in the life science leasing market in the summer of last year, uncertainty has since returned to the broader market and as a result, [targets set last year] have proved difficult to achieve,” the company said.
A number of potential acquirers have already held discussions with the REIT, it said, noting that the board “has confidence that… the business should be attractive to multiple parties if the outcome of the strategic review leads to the sale of the business”.
At the same time, the REIT is finalising changes to its investment advisory agreement with Ironstone Asset Management and G10 Capital that will see its fees reduced.
Life Science REIT’s move comes amid a wave of consolidation and take-private efforts among listed real owners and operators.
Dalata Hotel Group has launched its own strategic review that could lead to the company being sold. Assura is in play with private equity firm KKR and Primary Health Properties eager to strike a deal, while Warehouse REIT has received multiple take-private proposals from private equity firms Blackstone and Sixth Street Partners.
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