October 31, 2019 / 12:04 PM / a month ago

Property investor Madison earmarks $1 bln for central London despite Brexit

* Seeking residential, industrial property in central London

* Top 10 investor in Capco, favours Earls Court sale to Delancey

* Its City of London Houndsditch investment is for sale

By Carolyn Cohn

LONDON, Oct 31 (Reuters) - Property investor Madison International Realty has more than $1 billion to spend on central London, its president told Reuters, with Brexit uncertainty providing buying opportunities.

Madison, a top 10 investor in listed vehicle Capital & Counties Properties (Capco) with a 3.1% stake according to Refinitiv Eikon, started to build up the stake in the aftermath of the June 2016 referendum, Ronald Dickerman said, benefiting from the weaker pound.

Many investors are remaining on the sidelines, waiting to see how Brexit turns out. But Dickerman said he was looking to buy property now, in anticipation of a bounce on a Brexit deal.

“As Brexit gets more clarity, it will start to focus investors back on London,” Dickerman said, adding that Madison had “over $1 billion in dry powder” to spend in the city.

British Prime Minister Boris Johnson this week won parliamentary approval to hold a snap election in December which he hopes will break the deadlock over Brexit.

Madison, which has previously held stakes in the Lloyd’s of London building in the City and the Canary Wharf financial district, wants to invest in central London properties in the industrial - which includes warehousing and manufacturing - and residential apartment sectors, Dickerman said.

Madison has exposure to these sectors outside Britain, he added.

Dickerman said the firm’s geographical focus in Britain was on central London, as it offered the best investment opportunities.

Capco, which owns the Covent Garden retail area and a development in Earls Court in west London, has said it was planning to split the portfolio.

Capco said last week it was in exclusive talks with investment firm Delancey about a possible sale of Earls Court.

Dickerman said a sale of Earls Court would be preferable to a demerger.

Madison is also invested in a building in Houndsditch in the City, whose tenants include WeWork, but Dickerman said that building was up for sale.

Britain’s top property investment funds have shed almost 10% of their combined assets this year, as investors remain wary about Brexit.

Transaction volume in central London offices dropped to 4.5 billion pounds in the first half of 2019, down 44% from a year earlier, according to real estate broker JLL.

Overseas investors accounted for less than 1 billion pounds of the 1.8 billion in property deals transacted in central London offices in the second quarter, their lowest level since 2010.

But JLL highlighted the purchase of a City building by Hong Kong firm Cheung & Sons for 32 million pounds as one of the broker’s recent key transactions.

Reporting by Carolyn Cohn; editing by Jason Neely

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