Gravis' Matthew Norris: Why private equity is snapping up REITs for a bargain

Monopoly strategy

Owning a single property on a Monopoly board earns you some rent but, as avid players know, true power lies in owning the full set.

Once you control all sites in a colour group, you dictate development, set rent and unlock greater value. The same principle applies in corporate takeovers: control carries a premium. The recent wave of private equity acquisitions of UK REITs underscores a key investment truth: price is what you pay, value is what you get but control is where true opportunity lies. This dictum appears to resonate deeply in the investment committees of private capital. Daily share prices are visible to all but only full ownership allows investors to unlock the long-term potential hidden in undervalu...