ASI buys 60% stake in real estate specialist manager Tritax

Tritax is a specialist logistics real estate fund manager with AUM of approximately £5.1bn throughout the UK and Europe, including Tritax Big Box REIT and Tritax EuroBox plc. The group's investment teams will continue to service their existing mandates following the deal, retaining autonomy and control over decision making.

The purchase, which is part of ASI's bid to provide further "deep sector specialism" for its clients, means Tritax's management team - including CEO Colin Godfrey and finance director Frankie Whitehead - will remain unchanged, and will head up ASI Real Estate's global logistics team.

The team will report to global head of real estate Neil Slater, who has held his position at ASI for just over a year.

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Slater said: "Logistics is, and will remain, one of the most attractive income and capital growth sectors within real estate over the long term.

"The ongoing impact of technological developments, the effect on supply chain management and, ultimately, the increasing customer demand for control over the delivery of goods and services makes this transaction a scalable and exciting opportunity.

"Importantly, it provides the potential to grow and further diversify future earnings through greater investment capability and expertise, scale and credibility in this sector."

He added: "This transaction reiterates our commitment to evolve our real estate offering to ensure it develops with changing industry dynamics and client needs. I have a great deal of respect for Tritax and its achievements. We look forward to working with our new colleagues."   

Tritax Big Box, which was launched in December 2013, aims to provide capital appreciation and income through investments in logistics real estate, from large warehouses owned by major online retailers through to 'last mile' logistics - which are typically distribution centres involving the use of parcel or small package carriers to deliver products to the end consumer.

The REIT, which is currently trading on a premium to NAV of 3.7%, is 42% geared and yields 4.4%. Since its launch, it has achieved a total return of 109.6% compared to its average peer in the IT Property - UK Commercial sector's gain of 32.2%, according to data from FE fundinfo.

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Stephen Bird, CEO of Standard Life Aberdeen, said the transaction with Tritax is a "compelling strategic fit" for the business, in that it "significantly enhances our already strong real estate franchise, in an area of the market which benefits from accelerating trends".

"It is a great outcome for us, Tritax and our respective clients," he explained. "Our growth strategy is built around our clients' needs and there's no doubt that our strong capability in private markets, particularly real estate, will be a differentiator for our business."

Tritax's board remains "reassured" that ASI's stake "enhances the overall strength and capabilities" of Tritax's management team "without impacting its ability to continue the successful delivery" of the REIT's long-term strategy, via the "unaltered" investment management agreement between the company and the manager.

Sir Richard Jewson, chair of Tritax Big Box REIT, said: "With the existing dedicated Big Box team at Tritax retaining autonomy and control over investment decision making there will be no change to day-to-day operations.

"In the longer term, we believe that ASI's stake strengthens the manager through access to the resources of a large, global financial services institution, while preserving the manager's unique market leading logistics expertise for our shareholders.

"The board looks forward to the continued service and performance that our shareholders have benefitted from since IPO."

The transaction is expected to close in early 2021, subject to regulatory approval.