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London's stock markets saw support from real estate stocks as warehouse landlord Segro rejected a USD 16.6 billion takeover proposal from U.S.-based logistics real estate company Prologis. The move triggered a strong rally in property-related shares, with Segro emerging as the top performer on the FTSE 100. Gains across real estate investment trusts and developers helped lift the FTSE 250 index, while investors also monitored developments in UK politics and expectations around future interest rate decisions. Strong corporate updates from Liontrust, Berkeley Group and Primary Health Properties further supported market sentiment.
London's mid-cap stock index edged higher in recent trading as gains in real estate stocks helped support the market after Segro rejected a USD 16.6 billion takeover approach from U.S.-based logistics real estate company Prologis.
The FTSE 250 index rose 0.1%, while the benchmark FTSE 100 remained largely unchanged during morning trade. Property-related stocks led market gains, with the FTSE 350 Real Estate Investment Trusts Index jumping 6% and the broader real estate sector advancing 5.3%.
Segro was the biggest gainer on the FTSE 100, surging 15.6% after Prologis urged the company's shareholders to encourage its board to engage in discussions regarding the proposal. The U.S. logistics real estate giant argued that Segro's valuation did not fully reflect the strength of its business and portfolio.
The development comes as demand for logistics and warehousing assets continues to attract investor interest globally, supported by long-term growth in e-commerce, supply chain modernisation and distribution infrastructure. Segro is one of Europe's largest warehouse owners, with assets spread across the UK and continental Europe.
The rally extended across the real estate sector, with Harworth and Tritax Big Box REIT both gaining 5.6%. Investors viewed the proposed acquisition as a signal of continued interest in UK-listed property companies, particularly those with large logistics and industrial portfolios.
Market participants were also tracking political developments in the UK following Prime Minister Keir Starmer's resignation earlier this week. The resignation has triggered a leadership contest, with former Greater Manchester mayor Andy Burnham being viewed as a potential successor. The contest is expected to conclude in either July or September.
On the economic front, traders continue to assess the outlook for interest rates. Data compiled by LSEG showed that markets expect the Bank of England to raise borrowing costs by at least 25 basis points before the end of the year amid concerns about inflationary pressures linked to the ongoing conflict in the Middle East.
However, some policymakers have signalled a different approach. Bank of England policymaker Alan Taylor indicated that maintaining interest rates at current levels for an extended period could be the more appropriate response, particularly as recent economic data points to a cooling labour market.
Among individual stocks, fund manager Liontrust climbed 12.2% after reporting that net fund outflows had slowed during the current quarter. The company also highlighted progress in expanding its international presence and attracting additional institutional investments.
Homebuilder Berkeley Group rose 5.1% after providing a positive outlook on housing demand. The update suggested continued resilience in parts of the UK residential market despite ongoing affordability challenges and higher borrowing costs.
Primary Health Properties gained 3% after announcing advanced discussions with an investor regarding a potential joint venture involving its private hospital assets. The company, which specialises in healthcare real estate, said the proposed arrangement could support future growth opportunities within its portfolio.
Source Reuters
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