Blackstone, the giant US alternative assets manager, is to buy Industrials Reit (MLI) for around £500m after clinching the company’s recommendation for an all-cash bid.

In what could mark the start of a round of consolidation in London’s fragmented and heavily discounted listed property fund market, Industrials has accepted a 168p per ordinary share bid.

The final offer represents a premium of 42.4% to Industrials’ closing price of 118p on Friday and is 40.6% above the stock’s average price in March of 119.5p.

The shares soared 37%, or 44p, as soon as trading resumed this morning, hitting 162p, just short of the agreed price. 

Industrials, which specialises in multi-let industrial parks used by small businesses, last traded at a 14% discount below net asset value (NAV) of 136.1p, according to an estimate by its corporate broker Numis Securities.

Like all UK real estate investment trusts, Industrial shares have slumped as interest rates have soared, increasing finance costs and casting a cloud over the economy. In the past year its stock had plunged 37% having traded at a 27% premium over NAV at their peak.

Formerly known as Stenprop, under chief executive Paul Arenson and managing director Julian Carey, the company switched its investments away from prime European commercial property to what they viewed as an overlooked area of UK real estate.

The shares yield 6% and have delivered a 43% total return to shareholders over three years.