Two U.S. private equity firms look set to icrease their exposure to UK real estate.
U.S. private equity houses have moved closer to making two major UK real estate acquisitions as KKR and Blackstone line up accepted bids for Assura and Warehouse REIT, respectively.
The moves highlight increasing activity among private equity players in the UK and Europe as they hoover up multiple listed companies.
KKR has won a takeover battle for NHS landlord Assura after raising its bid to £1.7B. Assura confirmed that it had reached an agreement on a “best and final” bid led by KKR and Stonepeak Partners.
The medical real estate company sparked a bidding war when it said it had agreed to be bought by the consortium back in April for £1.61B and has now accepted a recommended all-cash takeover offer from Sana Bidco, a vehicle owned by KKR and Stonepeak.
The offer beat a bid from Primary Health Properties put forward in late May, which led to KKR slamming PHP’s offer as coming with “numerous critical issues” that could “significantly increase the financial risk profile of the combined entity.”
Assura said that private ownership would enable it to secure new funding and invest in healthcare infrastructure without the pressure of public market expectations.
Meanwhile, Warehouse REIT has reiterated its support for the unsolicited takeover approach by Blackstone, having agreed to an all-cash offer at £1.09 per share worth around £489M.
Announcing its annual results for the year ended 31 March, chairman Neil Kirton used the presentation to stress why the board was recommending the offer.
“Despite the company’s strong operational performance and the board’s continued conviction that we are invested in a very attractive asset class, given our size, the low liquidity of our shares, and with other, risk-free asset classes offering attractive returns, we have traded at a significant discount to net asset value for some time. It is in that context that the board has evaluated an offer for the company,” Kirton said in a statement.
Warehouse REIT’s annual results showed an increase in gross property income from £47M to £49M and a pretax profit of £42M, higher than £34M the previous year.
Its portfolio valuation fell slightly from £810M to £805M, while its net asset value rose from £536M in 2024 to £550M.
The business completed a range of initiatives during the year, including £300M of debt refinancing on improved terms, and its loan-to-value is now at 32.4%.