Madison International Acquires 3.12% of Capital & Counties
The real estate private equity firm has purchased 26.5 million shares of the UK-based property and development company.
NEW YORK City—Madison International Realty has acquired 26.5 million shares, amounting to a 3.12% stake in Capital & Counties Properties PLC, also known as CapCo. The firm’s primary businesses are Covent Garden; EC&O limited, which owns properties the Olympia and Earls Court; and an ownership stake in Great Capital Partnership, which has investments in commercial property in the Regent Street and Piccadilly neighborhoods.
“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,” says Ronald Dickerman, Madison’s founder and president. He however notes the turbulence in the current UK political climate and its impact on CapCo’s share performance.
Dickerman further states that Madison supports CapCo’s 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. In the Covent Garden area, CapCo owns most of the assets, 78 individual properties.
“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,” says Dickerman. He additionally states that the 77-acre Earls Court is prime London real estate with the potential to deliver up to 7,500 homes in a supply constrained marketplace, offices that will bring approximately 10,000 jobs to the area, and 7.5 acres of planned green space. As previously reported in GlobeSt.com, CapCo received approval for its master plan redevelopment of Earls Court in 2012.
“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,” says Dickerman.