Special Opportunities, the business that turned to the private markets after dropping plans to list as a real estate investment trust in June, is in late stage talks to buy the Abrdn Property Income Trust portfolio as the business considers a wind down, CoStar News understands.
Special Opportunities is understood to be close to exchange with a price of around £350 million agreed for the "Apex" portfolio.
Subsequent to CoStar News's exclusive story, the Abrdn board posted the following on the London Stock Exchange: "Abrdn Property Income Trust notes the recent press speculation and confirms that it is in advanced discussions with funds managed by GoldenTree Asset Management for the sale of the entire share capital of abrdn Property Holdings, a wholly-owned subsidiary of API.
"Any sale would involve the disposal of the company’s entire investment property portfolio, with the exception of its interest in the land at Far Ralia [in the Cairngorms].
"There can be no certainty that any binding sale agreement will be entered into, nor as to the terms on which any transaction may occur. API has not received any offer in respect of the issued share capital of API."
Abrdn Property Income Trust warned shareholders in May that it may sell its properties in a single sale at a discount to net asset value. At the time it said selling the circa £405.5 million portfolio, which reflects a 6% initial yield, in one transaction would return money to investors immediately and reduce the risk associated with individual sales.
The trust’s portfolio comprises mostly industrial properties, 47.7% as a percentage of net assets, followed by retail (24.8%) and office (20.8%). Assets include the Symphony industrial estate in Rotherham; 54 Hagley Road, an office in Birmingham; Whitehorse Business Park in Shellingford; the B&Q retail warehouse in Halesown; and Tetron 141 in Swadlincote.
Special Opportunities REIT's plans for the first real estate investment trust listing on the London market in three years were dropped after the minimum fundraising of £500 million was not reached. It would have been the largest real estate listing in a decade. It would also have been the first property trust to join the London market since October 2021 and the £350 million AIM listing of Life Science REIT.
Commitments had been received from three investors – GoldenTree Asset Management, TR Property Investment Trust and other Columbia Threadneedle investments funds, and the Bhavnani family office – to subscribe for between 104 million and 119 million ordinary shares, or £104 million to £119 million, on the basis of the target initial issue.
The internally managed REIT later said that management would execute its strategy in the private markets instead.
The management team comprises former LXi REIT Advisors colleagues Simon Lee, Freddie Brooks, John White and Rob Ward. The board has well-known non-executive directors Primary Health Properties founder Harry Hyman as chair and former Workspace chief executive Jamie Hopkins as senior independent director. A proposed £4 million would have been invested by the management team and non-executive directors at IPO.
The team has said the market is characterised by structural oversupply, driven largely from defined-benefit pension funds exiting their property holdings both through open-ended funds and insurer "buy-outs", following a surge in DB schemes reaching surplus as the gilt rate rose significantly over the last 18 months.
The acquisition is the latest example of a pick-up in corporate and portfolio real estate acquisitions with Starwood Capital recently agreeing a takeover of Balanced Commercial Property Trust, Segro agreeing to buy Tritax EuroBox and Lone Star buying a major portfolio of UK assets, principally industrial, from Charles Street Buildings for around £600 million, as reported.
ACRE Capital Real Estate is advising Special Opportunities; Gerald Eve is advising Abrdn Property Income Trust. All parties did not comment.