Candy Ventures walks away from Capco offer after Earls Court sale
Companies / 19 November 2019, 09:00am / Edward West
CAPE TOWN - Candy Ventures has walked away from an offer for Capital & Counties (Capco), after the UK and JSE-listed property group sold its Earls Court residential development in west London.
Capco’s Earls Court was sold for £425 million (R8.06billion) to Netherland-based pension group APG and specialist real estate and advisory company Delancey.
The deal is expected to complete before the end of the month.
The offer is a 16 percent discount to the balance sheet value of £508m at 30 June. However the value had declined substantially in recent years due to weak market conditions. The valuation had been £759m last year.
Capco’s share price closed 0.28percent lower at R50.05 on the JSE yesterday.
The duo will take over the 63percent interest in the Earls Court Partnership investment vehicle, excluding Lillie Square, with Transport for London retaining the balance.
Payments will be made on a phased basis, with 45percent payable on completion.
The deal means Capco will reduce its loan-to-value to 15percent from 19percent with cash and undrawn facilities of £900m following the sale of Earls Court in west London.
Capco chief executive Ian Hawksworth said following the disposal, “Capco will be a strongly-capitalised property investment business, centred around our landmark Covent Garden estate.”
Earlier this year Capco had planned to split its residential scheme at Earls Court and the Covent Garden retail estate. In September, Capco said it had put its demerger plans on hold, while it explored a potential sale of the Earls Court development site for thousands of luxury homes.
Then, last month, Candy Ventures, which has done a number of high profile property developments in the UK, announced a plan to make an offer for Capco.
“This transaction is consistent with Capco’s strategy of monetising investments at Earl’s Court over time with a focus on growing its central London property investment business, centred on Covent Garden,” Hawskworth said.
The Covent Garden holdings, which include Apple’s store and Balthazar restaurant, are valued at more than £2.6bn.
“Backed by a strong balance sheet and with a significant investment pipeline, our access to substantial liquidity will enable us to capitalise on opportunities,” Hawksworth said.
Capco reported a slight decline in equity attributable to owners to £2.6bn in the six months to June 30 and maintained its interim dividend at 0.5pence per share compared with the same period last year.
It announced at the time that the intention was to position the £2.6bn Covent Garden portfolio as a central London focused Reit.
The valuation of Covent Garden had risen by 0.5percent to £2.6bn in the interim period.
Covent Garden had experienced a positive trading environment in the interim period, with an increase in footfall and tenant sales, high occupancy levels and strong demand for office and residences, Capco said.