Madison International Realty has bought a 3.1% stake in Capital & Counties Properties.
It now holds around 26.5m shares in the company.
The firm said in a statement: “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 recognize the turbulence created by the UK political climate and the impact on CapCo’s share performance.”
It added that the acquisition fitted in with its strategy of investing in listed property companies with “prime quality portfolios” that it believes are “trading at outsized discounts to NAV”.
The news comes after Capco today (31 May) reported that the value of its interest in its Earls Court scheme has dropped to £412m.
Madison previously acquired a stake in Canary Wharf Group owner Songbird in 2013, before the sale of the listed company to Qatar Investment Authority and Brookfield two years later.
Songbird accepted a £3.50 per share offer, which valued the company at £2.6bn.
Given that Madison had bought 18.3m shares in Songbird – 2.5% of the company – when they traded at £1.40 per share, it turned out to be a profitable decision. On its £25.6m investment, it made a 254% return.
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