Riverside Capital acquires Merchant Property Unit Trust (IMPUT)
for $34m

Riverside Capital's acquisition of an 81.86% stake in Merchant Property Unit Trust (IMPUT) is strategically aligned with its objective to secure stable income and long-term growth through diversified real estate holdings. The portfolio consists of 35 trade park units across the UK, leased primarily to Travis Perkins, a leading FTSE 100 company in the builders' merchant and home improvement markets. This acquisition fills a critical gap by providing Riverside Capital with exposure to a stable tenant base under long-term leases that extend until December 2031, offering both immediate income stability and potential for future appreciation. The transaction was structured through a combination of equity investment from Connection Capital clients (£5.8 million) and Cubic Property Fund (£6.5 million), alongside senior debt financing of £21.7 million provided by Royal Bank of Scotland. This mixed capital structure ensures financial flexibility while maintaining leverage within prudent limits, aligning with Riverside's conservative risk management approach. This deal significantly shifts competitive dynamics in the UK real estate market by consolidating a significant portion of trade park units under a single entity, potentially limiting access to similar assets for competing funds and institutional investors. Additionally, it enhances Travis Perkins' operational efficiency by securing long-term property leases, thereby stabilizing its supply chain infrastructure. However, this consolidation could also attract regulatory scrutiny if it leads to market dominance in certain regions. Post-closure, key risks include potential fluctuations in rental income due to economic downturns affecting the construction and home improvement sectors, where Travis Perkins operates. Integration challenges are minimal given the existing lease structures, but Riverside Capital will need to monitor the portfolio closely for any tenant performance issues or regulatory changes that could impact long-term profitability. The outlook remains positive, with growth vectors stemming from potential property revaluation over the 18-year lease term and opportunities to optimize operational efficiency in collaboration with Travis Perkins.