The aim of this paper is to empirically identify the factors which are important in explaining takeover activity in the UK real estate market over the past 20 years. We adopt a dynamic duration analysis which allows to model the probability of mergers and acquisitions (M & A) as a function of both macroeconomic variables (inflation, interest rates etc) and company financial ratios. The inclusion of time-varying macroeconomic variables marks a departure from most previous studies of company acquisitions. The analysis is based on a unique panel data set collected from Thompsonís DataStream (total number of 139 companies), for the period 1980 to 2001. The findings suggest that the most important determinants of the takeover activity in the UK real estate market are company liquidity, profitability and debt coverage as well as financial market volatility, interest rates, current account and the economic cycle. The latter provides evidence that the macro-economy crucially affects the probability of mergers and acquisitions for the real estate industry in the UK. This paper represents our effort to build on the existing M & A literature and develop an early-warning system able to detect companies being a subject of a takeover bid. This will be useful for the industry professionals, regulatory authorities, shareholders and investors in their attempt to maximize their wealth.