Europi Property Group (‘EPG’ or ‘Europi’) has acquired a 3.25% stake in RDI, a diversified U.K. REIT with a portfolio of high-quality existing assets and redevelopment opportunities.
The investment provides EPG with exposure to RDI’s existing high-quality office, distribution & industrial portfolio as well as excellent management platform with robust sourcing capabilities. The company’s share price has been trading at a deep discount to its Net Asset Value due to the outbreak of Covid-19. Notably in June, Starwood Capital Group (‘Starwood’), acquired a 29.54% stake in RDI from its previously largest shareholder Redefine Properties.
EPG’s stake in RDI provides a debut entrance into the U.K., one of its high-conviction target markets. EPG’s ability to invest across not only sectors and geographies but also across public and private markets showcases its versatility to access attractive real estate market dislocations across a broad spectrum of opportunities.
Jonathan Willén, CEO of Europi Property Group, comments:
“We’re very excited about our stake in RDI, getting exposure to their existing high-quality portfolio and leading management platform. The outbreak of Covid-19 led to an enormous dislocation between share prices and Net Asset Values of some of the diversified REITs, providing a unique opportunity to acquire shares at fundamentally compelling valuations. As RDI undergoes a streamlining of its strategy and portfolio under the stewardship of its largest shareholder Starwood, we believe the company will generate very attractive risk-adjusted returns for its shareholders over the medium term.
The company’s recent sales of retail assets in both the UK and Germany, its new leadership under Stephen Oakenfull and it’s more defensive capital structure with only 32.6% LTV (and £240m of capital ready to be deployed into new opportunities), all point to the compelling value case at its current share price representing c40% discount to NAV.
The U.K. is one of our target markets for several reasons, including its continued robust demand from international investors and liquid capital markets. As we continue to assess investment opportunities in the U.K. we are very pleased to have invested in one of the country’s leading diversified real estate platforms.”
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