A consortium deal will carve up Picton’s portfolio between two listed REITs, promising shareholders a bigger dividend and an end to a long-running share price discount.
LONDON: Picton Property Income has agreed to be acquired in a joint all-share offer from LondonMetric Property and Schroder Real Estate Investment Trust (SREIT), in a deal that values the company at roughly £404 million.
Under the terms announced today, every Picton shareholder will receive 0.190 new LondonMetric shares and 0.894 new SREIT shares for each share they hold. Based on the two acquirers’ closing prices on 30 July, that values each Picton share at 78.7 pence — a premium of about 7% to Picton’s closing price the same day, and nearly 10% above its three-month average trading price.
The deal is being structured as a scheme of arrangement under Guernsey company law, with completion targeted for early September 2026, a statement said.
Splitting the portfolio
Rather than one buyer swallowing Picton whole, the consortium has divided its property portfolio along existing debt lines. LondonMetric will take roughly 46% of the portfolio by value — the properties tied to Picton’s Canada Life debt facility, a set of 22 assets worth around £320 million and heavily weighted toward industrial space. SREIT picks up the remaining 54%, some £382 million across another 22 properties secured against Picton’s Aviva and NatWest facilities, plus any unencumbered assets. LondonMetric will also absorb Picton’s net cash position, expected to be around £24 million at completion.
Once the dust settles, former Picton shareholders will own about 4% of the enlarged LondonMetric and a much larger 48.4% stake in the enlarged SREIT.
The pitch to shareholders
The consortium is leaning hard on the income story. It’s pointing to a pro-forma earnings uplift of nearly 40% and a jump in dividend income of over 47%, comparing LondonMetric and SREIT’s targeted first-quarter 2027 payouts against Picton’s most recent declared dividend. The companies caution these aren’t formal profit forecasts.
For those ending up as LondonMetric shareholders, the argument centers on scale and stability: a FTSE 100, triple-net-lease REIT with an investment-grade credit rating and a five-year track record of roughly 7% annual earnings growth. For those landing in SREIT, the sell is a larger, more diversified platform — combined assets worth around £850 million and roughly 450 tenants — run by Schroder’s real estate management arm, with cost efficiencies expected to push SREIT’s expense ratio below where either company sits today.
SREIT’s manager has also sweetened the arrangement on the fee side, agreeing to cut its management fee by 10 basis points across all tiers and to waive a year’s worth of fees (spread over 24 months) on the portion of Picton’s asset value it’s taking on.
Board recommendation and backing
Picton’s board is recommending shareholders vote in favour of the scheme, advised by Stifel on the financial terms. Picton’s directors have already committed just under 1.8 million of their own shares — about 0.35% of the register — to vote for the deal. TR Property Investment Trust, holding a much larger 11.67% stake, has also given an irrevocable commitment to back it, bringing total locked-in support to just over 12% of Picton’s shares.
What happens next
Picton has declared a first-quarter dividend of 0.69 pence per share ahead of the deal closing, payable to existing shareholders only. Once the acquisition completes, former Picton investors will start receiving dividends as LondonMetric and SREIT shareholders instead — with the first payouts expected around the two companies’ second-quarter dividends in November 2026.
The deal still needs to clear a fairly high bar: approval from 75% of Scheme Shareholders voting at a Court Meeting, a separate 75% vote at a General Meeting, and final sign-off from the Guernsey court. A full scheme document is expected within 28 days of today’s announcement.
LondonMetric CEO Andrew Jones framed the deal as a way to keep building the company’s position as the UK’s top net-lease REIT, while offering Picton holders “better share liquidity, greater income granularity and material earnings and dividend accretion.” SREIT chair Alastair Hughes called it “transformational,” pointing to a combined reversion rate of over 8% as room for future income growth. Picton chair Francis Salway, meanwhile, framed it as the payoff from the strategic review the company kicked off back in January — delivering, in his words, a “very material uplift” in both earnings and dividend income for shareholders.
