Madison International Realty, a leading real estate private equity firm, has acquired a 3.12% stake in Capital & Counties Properties on behalf of clients, and now holds approximately 26.5 million shares.
The company said: "We have acquired this holding in CapCo at a material discount to the most recently reported net asset value. We believe the current share price materially undervalues the potential of the Company and the underlying properties it holds. We are fully supportive of the Company’s strategic plans to demerge Covent Garden and Earls Court into separate entities as a means of unlocking the inherent value of each, particularly given their different investment profiles. We also recognise the turbulence created by the UK political climate and the impact on CapCo’s share performance.
“Covent Garden is an iconic central London estate which continues to deliver rental and reversionary growth, demonstrating the resilience of prime central London retail, despite wider political uncertainty. Equally, Earls Court is a fully consented 77-acre scheme that has the potential to deliver as many as 7,500 homes into a supply constrained marketplace and offices that will bring approximately 10,000 jobs to the area, as well as 7.5 acres of planned green space, representing a once in a life time opportunity to redevelop a piece of prime London real estate.Ronald Dickerman, Madison’s Founder and President, added: "The acquisition of this stake in CapCo fits well with Madison’s differentiated strategy of undertaking investments in listed property companies owning prime quality portfolios that we believe are trading at outsized discounts to NAV.”
Madison International Realty specializes in acquiring partial ownership stakes, joint venture, direct LP and listed property shares in prime properties and portfolios in primary markets in the US, UK and Western Europe. The firm provides joint venture equity to owners, sponsors and investors who are seeking to monetize existing equity positions, recapitalize balance sheets, or to replace existing capital partners seeking an exit.
Madison International Realty is a liquidity provider to real estate investors worldwide. Madison provides equity capital for real estate owners and investors seeking to monetise embedded equity, to replace capital partners seeking an exit and to recapitalize balance sheets. The firm provides equity for recapitalisations, partner buyouts and capital infusions; and acquires joint venture, limited partner and co-investment interests as principals.
Madison invests only in secondary transactions and focuses solely on existing properties and portfolios in the US, UK, and Western Europe. Madison has offices in New York, London and Frankfurt, Germany, where the firm operates under the name of Madison International Realty GmbH.
RPA Perspective Developer Capital & Counties’ troubled Earl’s Court redevelopment project saw £49 million was wiped off the value on one part of the site last week amid a gloomy property market.
Capco, which is working on a £12 billion masterplan to create 7,500 new homes in Earl’s Court, said one part of the land it has in a joint venture with Transport for London has suffered its fifth writedown in two years. The plot was once home to Earl’s Court exhibition centres and has planning consent for 3 new homes and commercial space.
A valuation from property agent JLL puts Capco’s stake in that site at £412 million in March, down 10.5% from last December.
Capco said the change takes into consideration “increased developer’s margin and total development cost assumptions as well as a more conservative view” on the value of the scheme when it completes.
The firm is exploring a possible de-merger of the division away from its larger Covent Garden estate. It has also been in talks about a potential outright sale at Earl’s Court.
