While private equity fund managers jet around the world in search of fresh investors, publicly listed real estate investment trusts (Reits) are turning to the public markets. After a quiet few years as property values adjusted to higher interest rates, Reits have raised £2.3bn over the course of this year, according to Shore Capital, giving them firepower to fund new acquisitions.
British Land (BLND) is the latest to join the party, turning to its shareholders for the first time in 10 years. As part of the placing, it raised £301mn via a public placing to part-fund its £441mn acquisition of seven retail parks from Brookfield. The Reit, which currently trades on a discount to net asset value (NAV) of 24 per cent, raised equity at 422p, a 4 per cent discount to its closing price before the raise was announced.
Previously, conversations about raising equity focused on the steep discounts to NAV experienced by most of the sector.