LondonMetric to Acquire Urban Logistics REIT in £698.9M Deal

In a major consolidation move within the UK real estate sector, LondonMetric Property PLC has announced the acquisition of Urban Logistics REIT in a deal valued at £698.9 million. The transaction, structured as a cash-and-share offer, is set to establish one of the UK's most dominant logistics-focused real estate investment trusts (REITs).

The deal will see Urban Logistics shareholders receive 42.8p in cash and 0.5612 LondonMetric shares per Urban share, translating to an implied value of 191.5p per share—a 22% premium on Urban Logistics’ last closing price prior to the announcement. Upon completion, LondonMetric shareholders will control around 89% of the merged entity, while Urban shareholders will own the remaining 11%.

Expanding a Logistics Powerhouse

Post-acquisition, the combined company will oversee a £7.3 billion property portfolio, generating over £415 million in annual rental income. Roughly 55% of the portfolio will be comprised of logistics and warehouse assets, an increasingly in-demand asset class due to the rise of e-commerce and the strategic reshoring of supply chains post-Brexit and pandemic disruptions.

Commenting on the deal, Andrew Jones, CEO of LondonMetric, stated:

“This is a rare opportunity to accelerate our strategy and deepen our logistics exposure at a very attractive valuation. Urban Logistics is a natural fit—operationally and culturally—and will add further scale and depth to our high-quality portfolio.”

Strategic Synergies and Sector Confidence

The acquisition is also seen as a vote of confidence in the long-term fundamentals of the UK logistics property market. With consumer expectations around next-day delivery and last-mile logistics rising, demand for well-located warehouse space near urban centres has outstripped supply—pushing rents higher and boosting investor interest.

Analysts believe the merger will unlock synergies, streamline asset management operations, and provide greater clout when negotiating leases or developments. Urban Logistics’ existing leadership, known for its local market expertise and a focus on “last-touch” logistics, is expected to play an important role post-merger.

Recent Acquisition Momentum

This deal follows LondonMetric’s strategic move in September 2024, when it acquired a six-asset urban logistics portfolio for £78 million. The acquisition of Urban Logistics REIT significantly extends that momentum, creating a diversified logistics platform across key UK distribution hubs.

The transaction is subject to regulatory and shareholder approval, with a general meeting scheduled for early June 2025. If approved, the transaction is expected to close shortly thereafter.

Market Reaction

Investors welcomed the news, with both companies' shares moving positively in early trading. Market commentators highlighted that the premium offered to Urban Logistics shareholders, combined with the potential for enhanced dividend growth and rental income stability, made the deal attractive from both a strategic and financial standpoint.

The merged REIT will trade under the LondonMetric name, maintaining its listing on the London Stock Exchange, and is set to become a major force in the UK’s ever-evolving logistics and industrial real estate landscape.