Madison helps Statoil HQ owner unlock equity

Madison International Realty tells PropertyEU that owners and developers are seeking creative ways to extract capital from their portfolios.

Madison made its first foray into Scandinavia this year, closing the acquisition of a 35% equity stake in the Statoil complex in Oslo for NOK 392 mln (€53 mln). The deal is understood to reflect a net initial yield of 6%. A group of local investors have acquired another 35% stake in the property.

New York-based Madison said the deal - Norway's second-largest single-asset transaction in 2012 - was first signed in December last year and closed in January 2013.

‘This is our first investment in Scandinavia,’ Derek Jacobson, managing director at Madison International Realty in New York, told PropertyEU in an interview. ‘The economic environment in Norway in particular is very compelling. This, topped with the unique situation that this transaction presented, is what drew us to the deal.’

The asset was sold by IT Fornebu (ITF), a Norwegian public limited company which owned the entirety of the building. Investment bank Arctic Securities arranged the sale process after having obtained exclusivity as buy-side advisor from ITF in the beginning of December 2012.

Arctic also raised the equity and secured bond financing in order to sign an unconditional sale and purchase agreement before year-end 2012. Jones Lang LaSalle was also involved in the sale.

Following the transaction, ITF holds a 30% stake in the building while Madison and a group of seven local investors own 35% each.

The nine-storey Class A office building provides 65,770 m2 of space and 846 parking spaces in the Fornebu sub-market of Oslo. The property is 100% with a 15-year rental agreement to energy group Statoil. As of October 2012, the property is fully occupied by the tenant and is in full operation.

'Madison is an ideal partner for owners and developers seeking to monetize equity embedded in their assets,' commented Madison's Jacobson said. 'As real estate fundamentals in core markets continue to improve, owners, especially developers seek creative ways to extract capital from their existing portfolios in order to pursue other opportunities.'

The company plans to retain the building on the medium to long term, Jacobson said. ‘There is a 15-year lease in place, so we will keep the asset for some time.’

Madison came into the spotlight last year with the acquisition of the 56.9% stake held by Morgan Stanley's P2 Value fund in the Trianon office tower in Frankfurt. The sale was part of the liquidation of the P2 Value fund.

Madison is a private equity business founded in 1996 and specialising in the ownership of interests or fractions of buildings with a core investment profile. The company manages €1.3 bn of capital and in Europe has offices in Frankfurt and London.