Tritax Big Box, a leading warehouse operator with major clients such as Ocado, Amazon, and B&Q, has announced its agreement to purchase UK Commercial Property REIT (UKCM) for £924 million. This strategic acquisition is poised to form a colossal real estate entity valued at £3.9 billion, boasting a combined property portfolio of £6.3 billion predominantly in the logistics sector.

Pending shareholder consent, UKCM’s investors will secure a 23.3 percent stake in the new conglomerate. UKCM, the smaller entity in this transaction, currently invests in a diverse range of properties, including shopping centres, office buildings, and distribution centres.

The deal places UKCM’s shares at 71.1p each, indicating a 10.8 percent increase over its closing share price last Friday, reflecting a positive outlook amidst a challenging period for commercial property values affected by rising interest rates.

Tritax has communicated to its investors the synergy this merger brings, combining two logistics-focused investment portfolios. This collaboration is expected to enrich the combined entity’s customer offerings through an extensive logistics portfolio, catering to a wide range of property sizes and tenant uses, from large-scale ‘Mega-Boxes’ to smaller logistics assets strategically situated in key urban locales.

This merger is part of ongoing consolidation within the REIT sector, which has seen significant M&A activity since 2019. It follows the successful merger of Capital & Counties Properties and Shaftesbury, which proceeded after approval from the Competition and Markets Authority (CMA), underscoring the competitive dynamics in London’s West End.

The announcement has already influenced the stock market, with UKCM shares climbing 5.14 percent to 67.50p, while Tritax shares saw a slight decrease of 2.81 percent to 155.70p in early afternoon trading. This acquisition marks a significant milestone in the UK real estate market, highlighting the strategic shifts companies are making to bolster their market positions and adapt to the evolving commercial landscape.