Is London still the right address for listed real estate?

"Location, location, location": the ultimate real estate proverb and the programme that made Kirstie and Phil household names. For years, we've talked about location as the defining factor in property, but more recently it seems the address of the building pales in comparison to where the company that owns it is listed. 

The proposed £12.6 billion approach from Prologis for SEGRO, which briefly propelled industrial property from the trade press into the national headlines last week, is the latest reminder that overseas investors continue to see value in UK listed real estate. At the same time, reports that more UK companies are looking at New York suggest some boards are coming to a similar conclusion from the opposite direction: perhaps it's not the business that's being undervalued, but the market it's listed on.

They're different situations, but they don't feel entirely unrelated. The obvious conversation around SEGRO is whether the price is high enough. The more interesting one, at least to me, is why UK listed property companies seem to have become such attractive acquisition targets.

UK real estate has never struggled to attract international capital. Investors from around the world have been buying offices, logistics parks, retail assets and student accommodation here for decades. What's changed is that the opportunity increasingly seems to be the listed companies themselves, not just the assets they own. 

Maybe overseas investors are simply taking a longer-term view than public markets. Maybe UK listed real estate really is trading at discounts they see as an opportunity. Or maybe it's a symptom of something broader about confidence in UK equity markets.

It's probably a combination of all three. What makes real estate interesting is that value has never been just about bricks and mortar. A logistics portfolio isn't simply a collection of warehouses. It's land, planning expertise, customer relationships, development capability and, increasingly, access to power. Those things create value over years, not quarters.

That's not to say markets always get it wrong. The failed merger between Hammerson and intu is a reminder that markets sometimes spot structural change earlier than boards do. Looking back, it's easy to see the pressures facing parts of the retail sector. At the time, the picture was much less clear.

It's also why communications matters. When a board rejects a bid, it's making one of the biggest communications decisions it will ever make as it isn't simply saying that "this isn't enough" but that "we believe we can create more value than this business is being given credit for". The challenge is convincing investors this is true.

Taken together, these developments suggest something bigger than a handful of takeover approaches or companies flirting with New York. They point to a growing debate about where listed real estate is most likely to be valued fairly.

For years, location has shaped the value of real estate. Increasingly, location may also determine the value of real estate companies.