Is there another suitor looming for National Storage REIT?

The trading volumes in National Storage REIT were large on Friday.

With Vicinity Centres raising $1.4bn and talk of Charter Hall as a potential buyer of the Caltex petrol station sites, the real estate sector continues to be a major talking point.

But it is not just Charter Hall and Vicinity Centres that are in focus for real estate market watchers and dealmakers — National Storage REIT continues to be under the spotlight. Apparently, investment bank UBS was busy buying up stock in the company late last week and on Monday, which led some to wonder whether a suitor such as Blackstone was once again circling the listed storage asset owner.

The trading volumes in the stock were large on Friday, and it is thought that the Swiss investment bank has bought more than 3 per cent of its shares since Thursday.

However, the understanding from those close to the situation is that the trading was not on behalf of any strategic buyer. Rather, it was purely stock changing hands through the UBS equities desk.

While nothing may be going on now, most do not think it is inconceivable that another party comes forward with an offer for National Storage REIT soon.

Shares in National Storage REIT closed on Monday at $1.84.

As reported by DataRoom in February, Blackstone, through UBS, had been weighing a bid for National Storage REIT before it became a target for Gaw Capital and Warburg Pincus, which both offered $2.20 a share for the company, and Public Storage.

Earlier in the year, it appeared it was about to be bought by the US-based Public Storage for $2.40 a share, or $1.9bn.

But when the COVID-19 outbreak occurred, Public Storage walked away from the deal. Since then, local rival Abacus Property Group has been buying up shares through Macquarie Capital, amassing 7.09 per cent of the stock.

However, most believe its interest lies in gaining a seat at the table should another party lob a takeover bid for the business, rather than making an offer itself. National Storage is advised by JPMorgan, while UBS had also been an adviser to Warburg Pincus for its bid along with Credit Suisse.

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The UBS trade has caught attention as the investment bank is believed to be forging ahead with plans to find buyers for a 49 per cent interest in the $2bn Caltex service station portfolio of 250 properties.

It is understood that bids went in a couple of weeks ago and Charter Hall continues to be seen as the most strongly positioned buyer.

Meanwhile, the $1.4bn raise by Vicinity Centres came as a surprise to some given the group has recently been undertaking a share buyback. However, the group’s shopping centres were always expected to be hard hit by COVID-19 disruptions as retail tenants shut stores and remain in negotiations over rent relief.

Most say it is no wonder it was keen to source fresh equity to prevent a large increase in debt levels as the value of its property portfolio declined.

The raise means any suggestions of its 9.7 per cent shareholder, billionaire retailer John Gandel, privatising the company have been put to rest.

Mr Gandel’s business, The Gandel Group, only took up $100m in the offer, or three-quarters of its allocation.

The thinking is his motivation lies in protecting his interests in Melbourne shopping centre Chadstone, which he and Vicinity jointly own.