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Yahoo
4 days ago
- Business
- Yahoo
These 2 FTSE stocks could benefit from the growth of AI and the demand for new data centres
In my opinion, there are two FTSE stocks — Segro (LSE:SGRO) and Tritax Big Box REIT (LSE:BBOX) — that look set to gain from the anticipated explosion in the demand for data centres. According to McKinsey & Company, by 2030, $7trn will need to be spent globally on building the physical infrastructure necessary to house the servers and other hardware required to run artificial intelligence (AI) applications. Closer to home, Barbour ABI has found nearly 100 live UK planning applications for such properties. And reflecting their energy intensity, Mordor Intelligence reckons the capacity of domestic data centres will grow from 2,590 MW in 2025 to 4,750 MW by 2030. That's equivalent to an average annual increase of 12.9%. The country's number one As the UK's largest real estate investment trust (REIT), Segro already has a significant foothold in the market. It owns Slough Trading Estate, Europe's largest business park and home to the continent's biggest cluster of data centres. It also leases other warehouses to companies operating in the sector. Its tenants include Equinix and Digital Realty Trust, two of the industry's largest players. But its share price has disappointed recently — it's down 28% since August 2024. And the commercial property market can be volatile. However, its balance sheet is strong — its loan-to-value was 31% at 30 June. Also, 73% of its lettable area is located in seven countries in continental Europe, which provides it with a certain degree of diversification. Another option Tritax Big Box REIT, the UK's largest owner of logistics facilities, now has two data centres in its portfolio and has announced plans to build a new one near Heathrow airport. It anticipates spending £200m on similar properties in 2025 and £100m-£200m annually thereafter. It estimates the annual rental yield will be 9%-11%. Not surprisingly, the trust views the sector as one of its key growth drivers. As part of its expansion plans, Tritax has made an offer to buy Warehouse REIT. If the deal is successful, it will create a combined £7.4bn property portfolio. The takeover target has 409 tenants at 60 sites in England and Scotland. Immediate cost savings of £5.5m a year are expected. The proposed merger reflects a trend in the investment trust industry where stock market valuations are often lower than the value of the underlying assets. This apparent lack of appreciation from investors has frustrated directors and shareholders alike. Tritax presently trades at a 28% discount. Warehouse is valued at 11% less than its book value. Good for income One of the principal attractions of REITs is that to qualify for certain tax exemptions they must return at least 90% of rental profits to shareholders. This means they usually offer generous yields. For example, based on dividends paid over the past 12 months, Tritax is presently (15 August) offering a return of 5.6%. For comparison, Segro's is 4.6%. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. However, the trust's dividend could come under pressure if interest rates remain at historically high levels. And possible vacancies remain an ever-present threat. But like Segro, I think Tritax has exposure to a sector that's going to see significant growth over the next decade or so. Those that agree with me could consider adding either of them to their portfolios. The post These 2 FTSE stocks could benefit from the growth of AI and the demand for new data centres appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Segro Plc, Tritax Big Box REIT Plc, and Warehouse REIT Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Zawya
11-07-2025
- Business
- Zawya
UK's Warehouse REIT shifts allegiance to Blackstone over Tritax
Britain's Warehouse REIT recommended Blackstone's sweetened bid to its shareholders on Friday, withdrawing support for industry peer Tritax Big Box REIT's offer for the logistics specialist. Blackstone raised its offer for the London-listed company to about 489 million pounds ($662.20 million) on Thursday, outbidding Tritax's cash-and-stock offer of 485.2 million pounds. Logistics has remained attractive to property investors in an otherwise lacklustre real estate market, due to robust demand from eCommerce retailers seeking warehouse spaces to better service their clients. Real estate investment trusts – listed funds dedicated to property – have also seen a wave of dealmaking as they try to bulk up to improve profitability in tough trading conditions. Tritax on Thursday said it continued to believe that its buyout proposal was a "compelling proposition" for Warehouse shareholders. The company did not immediately respond to a Reuters request for comment on Friday. ($1 = 0.7384 pounds)
Bloomberg
11-07-2025
- Business
- Bloomberg
Blackstone's Sweetened Bid Gets Backing of Warehouse REIT Board
The board of UK landlord Warehouse REIT Plc has recommended shareholders accept an increased offer for the company made by Blackstone Inc. that topped a proposal by rival Tritax Big Box REIT Plc. Blackstone's latest offer is 'fair and reasonable,' Warehouse REIT said in a statement Friday. The revised proposal provides shareholders with a 'certain all-cash offer' at a premium to Tritax's cash and share bid, Warehouse REIT chairman Neil Kirton said.
Yahoo
11-07-2025
- Business
- Yahoo
UK's Warehouse REIT shifts allegiance to Blackstone's sweetened bid
(Reuters) -Britain's Warehouse REIT recommended Blackstone's sweetened bid to its shareholders on Friday, withdrawing support for industry peer Tritax Big Box REIT's offer for the logistics specialist. Blackstone raised its offer for the London-listed company to about 489 million pounds ($662.20 million) on Thursday, outbidding Tritax's cash-and-stock offer of 485.2 million pounds. ($1 = 0.7384 pounds)
Reuters
11-07-2025
- Business
- Reuters
UK's Warehouse REIT shifts allegiance to Blackstone's sweetened bid
July 11 (Reuters) - Britain's Warehouse REIT (WHRW.L), opens new tab recommended Blackstone's (BX.N), opens new tab sweetened bid to its shareholders on Friday, withdrawing support for industry peer Tritax Big Box REIT's (BBOXT.L), opens new tab offer for the logistics specialist. Blackstone raised its offer for the London-listed company to about 489 million pounds ($662.20 million) on Thursday, outbidding Tritax's cash-and-stock offer of 485.2 million pounds. ($1 = 0.7384 pounds)
