The premium price Blackstone is paying for Industrial Reit (MLI ) has fallen after strong growth in the portfolio of multi-let business parks.

The US private equity group’s 168p-per-share cash offer for the £499m trust is already paying off, as the assets in the fund have benefited from a stabilisation in valuations in the derated property market.

The trust has disclosed a rolled forward net asset value (NAV) of 150p, which is down just 7% since September 2022, when Trussenomics sent bonds markets into meltdown and set commercial property up for one of its worst ever quarters.

Peel Hunt analyst James Carswell said this was ‘11% ahead of our forecasts’ and ‘reduces the premium Blackstone is paying over NAV to 12%’, although this reduces further to 9.5% when the final dividend is factored in.

‘The portfolio has fallen 5% in the second half, a material outperformance against the 21% decline for industrial property within the CBRE monthly index,’ said Carswell.

He said Blackstone’s offer price, which valued the Reit at £511m, is at a premium ‘but other listed Reits remain on far wider discounts’.

Carswell added that the fund is ‘lowly-levered’, thanks to the disposal of a care home joint venture – the last non-industrial asset to be sold – which reduced its loan-to-value borrowing measure at just 23%.

In a scheme document regarding the bid, the board said the trust’s share price and suffered a ‘significant derating’ due to inflation and higher interest rates that had constrained its ability to raise capital and grow, and increased its cost base.

The board received and rejected multiple bids from Blackstone over a period of weeks and said in the final offer price, which the board is backing alongside a fifth of shareholders that have sent letter of intent to support the transaction, represents ‘premia of 42.4%’ to the share price of 118p as of 31 March.

It said the offer provided shareholder the opportunity to walk away with cash and ‘strongly support Industrials in its next phase of growth’ by continuing to ‘invest in the business to improve the long-term value of Industrials’ business and increase the future opportunities’.

The fund reported 4.8% like-for-like growth in rents in the first three months of the year and completed 120 leasing transaction.