Capco focused on London’s West End


Capco focused on London’s West End


Published Date: 2020-02-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

Capco focused on London’s West End

The London property owner has reported a decline in its property portfolio and net asset value after selling its Earls Court development.

Capital & Counties' property portfolio fell by 1.7% to £2.8 billion last year after it sold its Earls Court development in London and the value of its remaining property decreased by 1.4% in a turbulent retail market. Its net asset value also declined.

Reporting back for the year to end-December, the London property owner said the West End remained resilient, although not unaffected by the well-documented challenges in the retail sector. It sold its Earls Court property for £425 million to Dutch pension fund APG and property investor Delancey in order to focus on its central London property investment business in the upmarket shopping and entertainment district of Covent Garden. It believes London's West End offers greater insulation from the current challenges.

Capco's net asset value using European Public Real Estate Association (EPRA) calculations fell 10% over the year to 293 pence per share due to the Earls Court sale and the valuation movement on Covent Garden. Underlying earnings per share rose 11% to 1p and its proposed a final dividend of 1p, taking its full-year payout to 1.5p per share.

The group said the Earls Court disposal gave it more financial flexibility and positioned it to capitalise on new investment opportunities. It ended the period with net debt of £442 million, down from £573 million, with capital commitments of £14 million. Its loan-to-value declined to 16% from 18%, before receipt of a £210.4 million deferred consideration it will receive over the next two years following the disposal.

It said the second phase of its Lillie Square development, which wasn't included in the Earls Court sale, was on track for completion and handover this year, with over 80% of the units pre-sold, representing about £100 million of sales proceeds.

Its shares declined 4.5% to R43.95 yesterday.


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