On Friday afternoon following the closure of trading for the week, a 13D filing was lodged with the SEC for Indus Realty (US:INDT) from private equity holder Centerbridge Partners.

In the filing, Centerbridge stated that they regularly engage with management to conduct valuations on the company and its business and on the 14th of November, after recent analysis decided to change its intention for the holding.

Centerbridge did not disclose a change to its 14.8% stake in the company but instead told the market that it began discussions with INDT’s management to explore possible strategic transactions which included a proposal to acquire the trust.

The private equity firm said that based on its evaluation of the REIT and with market conditions, they anticipate that a proposal will be submitted.

The takeover interest follows INDT’s weakening trust price which has declined -30% over the course of 2022. The weakness has been prevalent across most of the property sector with the onset of rising interest rates and macroeconomic headwinds.

While no potential proposal may fully eventuate from discussions, the news will put the REIT on the radar for other potential suitors and firms in the market that may see the news and decide to run the numbers on the trust.

Two weeks earlier, Indus reported 27% rental revenue growth over the year to $13.0 million during the release of its third quarter financial update. The figure came in 5.6% ahead of analyst forecasts. Management said that the main driver of the rental revenue growth came from the net addition of 1.2 million square foot industrial/logistics space to the portfolio.

Core funds from continuing operations grew from $3.8 million to $5.7 million over the year equating to FFO of 55 cents per share for the quarter. The street was expecting a figure below 50 cents.

Net operating income from continuing operations grew to $10.2 million and outpaced guidance that management provided for $9.1 to $9.6 million.

Indus executed 5 leases during the quarter for 418,000 square feet during the quarter.

Due to the better than expected results, management upgraded full year net operating income guidance where it now expects to generate net operating income between $38.1 to $38.4 million compared to prior guidance of $36.5 to $38.0 million.

Analysts from Baird Equity Research told investors that they expect some drag on growth in 2023 as INDT completes some of its transactions and forecast growth to re-accelerate again in 2023.

The firm remains bullish on the company given its continued leasing success which drives strong retention activity with limited downtime. Baird remains ‘outperform’ rated on the stock with a $61 target.

On average, INDT has a consensus ‘overweight’ rating and an average $66.40 target price.

Fintel’s fund sentiment score of 34.70 remains bearish on INDT’s institutional buying activity. This score ranks INDT in the bottom 30% of 35,764 companies.

Despite the weak fund sentiment score, INDT still has 215 institutions on the register that own 8.2 million shares. Some of the largest institutions include: Centerbridge Partners, Conversant Capital LLC, Monarch Alternative Capital LP, Gabelli Funds Llc, Gamco Investors, Inc. Et Al, Hazelview Securities Inc., BlackRock Inc, The Gabelli Small Cap Growth Fund, and Teton Westwood Mighty Mites Fund Class.

This article originally appeared on Fintel

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