LondonMetric Property will acquire CT Property Trust for £198.6 million in shares

LondonMetric Property will acquire CT Property Trust for £198.6 million in shares

LONDON, UK: LondonMetric Property Plc will acquire the entire issued and to be issued share capital of CT Property Trust [CTPT] at the rate of 0.455 new LondonMetric shares for each CTPT share.

On the basis of the Closing Price per LondonMetric Share of 188.0 pence on 23 May 2023, the Acquisition values each CTPT Share at 85.5 pence and the entire issued and to be issued ordinary share capital of CTPT at approximately £198.6 million.

LondonMetric is a FTSE 250 listed internally managed “UK-REIT” that owns one of the UK’s leading listed logistics platforms alongside a grocery-led long income portfolio and has a market capitalisation of £1,848.0 million as at the Latest Practicable Date.

As at 31 March 2023, it owns approximately £3.0 billion of real estate assets across a 16.1 million sq. ft. portfolio generating £145.2 million per annum of contracted rental income. LondonMetric’s last reported NTA per LondonMetric Share was 198.9 pence as at 31 March 2023.

LondonMetric’s objective is to own and manage desirable real estate that meets occupiers’ demands, delivers reliable, repetitive and growing income-led returns and outperforms over the long term.

IRP Property Investments Limited (IRP) merged with ISIS Property Trust Limited (IPT) in April 2013 to form CTPT, then named F&C UK Real Estate Investments Limited.

CTPT is an externally managed UK-REIT that invests principally in three UK commercial property sectors: (i) industrials, logistics and distribution; (ii) retail (including retail warehouses); and (iii) offices.

As at 31 March 2023, CTPT’s property portfolio comprised 34 properties valued at approximately £288.3 million, 56.0 per cent. of which comprised industrials, logistics and distribution assets, 21.9 per cent retail warehousing, 15.7 per cent offices and 6.4 per cent high street retail assets. CTPT also had approximately £30.8 million of cash available as at 31 March 2023.

Davina Walter, Chairman of CTPT, said: “Our Company’s investment strategy has delivered strong portfolio returns for shareholders since the merger of IRP Property Investments Limited and ISIS Property Trust Limited in April 2013. Our manager, Columbia Threadneedle, has built an attractive UK commercial property portfolio and pivoted the balance of the portfolio in recent years to a high industrials weighting, reflecting our conviction in the ongoing strong occupier demand in the sector.

“LondonMetric also has a portfolio with a high exposure to the industrials sector and a proven track record in delivering returns from this asset class. The portfolio fit is compelling.

“Despite the progress made in pivoting the portfolio, excellent long term portfolio performance and regular dividend payments, CTPT has traded at a double digit discount to NAV for a number of years. We believe this is reflective of our small size and external market conditions.

“This Acquisition by LondonMetric allows our shareholders to benefit from being exposed to an enlarged UK-REIT with an approximately £3 billion property portfolio, continuously growing dividends and an outstanding track record of shareholder value creation. The Acquisition also represents a compelling premium to the CTPT Share Price. We therefore recommend the Acquisition to shareholders.”

Patrick Vaughan, Chairman of LondonMetric, said: “We believe the Acquisition is compelling for both CTPT and LondonMetric Shareholders. The CTPT management team has assembled a high quality platform of complementary assets, diversified by tenant base and geography and with significant reversionary potential.

“The Acquisition grows the Combined Group’s exposure to the winning sectors of urban logistics and long income, underpinned by evolving consumer demand and delivering strong rental growth.   

“In the current interest rate environment, we believe resilient cash flows, scale and liquidity will be the defining characteristics that differentiate the winners and the losers. The income and income growth characteristics of the CTPT portfolio, combined with select asset management opportunities, should enhance our total return focus, whilst enabling us to drive earnings optimisation and maintain our progressive dividend policy.”

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