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Property investor Madison earmarks US$1b for central London despite Brexit

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

[LONDON] Property investor Madison International Realty has more than US$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 per cent 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 Mr 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," Mr Dickerman said, adding that Madison had "over US$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, Mr Dickerman said.

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

Mr 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.

Mr 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 Mr Dickerman said that building was up for sale.

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

Transaction volume in central London offices dropped to £4.5 billion(S$7.94 billion) in the first half of 2019, down 44 per cent from a year earlier, according to real estate broker JLL.

Overseas investors accounted for less than £1 billion 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 millionas one of the broker's recent key transactions.

REUTERS

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