Madison International Realty LLC bought a “small” stake in Songbird Estates Plc, (SBD) the company that controls Canary Wharf, as a greater diversity of industry makes it more attractive, according to the New York-based firm’s head of European investment.
“The dynamic out at the Wharf is changing and I think they’re proactively managing that change as they realize they can’t live off financial services,” Derek Jacobson, a managing director at Madison, said in an interview yesterday. “They’ve got tech and other industries that they’re courting.” He declined to say how many Songbird shares Madison acquired.
Canary Wharf Group Plc, 69 percent owned by Songbird, is planning to develop office buildings for technology companies together with stores and 3,000 homes at the 20-acre (8-hectare) Wood Wharf site next to the financial district. The first phase of development is due to be completed in 2018 to coincide with the opening of Crossrail, which will create a 40-minute link between the district and London Heathrow, the world’s busiest international airport.
“The quality of the office space out there is unmatched, especially as Crossrail becomes a reality,” he said. “The accessibility to the market will be much improved. We like the underlying real estate.”
No one at Songbird was immediately available to comment. The company’s largest shareholders include Qatar Holding LLC, investor Simon Glick of New York, a unit of China Investment Corp. and funds managed by Morgan Stanley, according to data compiled by Bloomberg. Its market value is more than 1 billion pounds ($1.5 billion).
Madison International buys minority stakes in properties and provides capital to investors to improve their balance sheets in return for part-ownership of assets. It invested about half of its last $520 million fund in Europe, mainly in the U.K., Jacobson said. The company is currently raising $750 million for a new investment fund and a similar percentage of that capital will be focused on Europe, he said.
Madison International and a group of undisclosed investors bought the European headquarters of Statoil ASA (STL) in Oslo for about 430 million euros ($557 million) this year. Madison provided 35 percent of the equity invested, according to broker Jones Lang LaSalle Inc. (JLL), which advised seller ITFP on the sale.
“We did that deal in under three weeks, including placing the equivalent of a 320 million-euro bond into the Norwegian pension market in less than two days,” Jacobson said.
Madison may invest more in Norway and it’s also looking at other European countries including Germany, Austria and Belgium.
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