EPG acquires RDI stake to exploit 'deep discounts' in share price

Brunswick-backed pan-European investment firm Europi Property Group (EPG) has acquired a 3.25% stake in RDI, a diversified UK-focused REIT.

EPG noted that RDI'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 acquired a 29.54% stake in RDI from its previously largest shareholder Redefine Properties.

According to EPG, the deal brings exposure to RDI’s existing high-quality office, distribution & industrial portfolio as well as its management platform with 'robust sourcing capabilities'. It marks EPG's UK debut, just over a year after Brunswick launched the pan-European venture.

Jonathan Willén, CEO of EPG, said: '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 £240 mln of capital ready to be deployed into new opportunities), all point to the compelling value case at its current share price representing 40% discount to NAV.'

Willén concluded: 'The UK 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 UK. we are very pleased to have invested in one of the country’s leading diversified real estate platforms.'


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