JOHANNESBURG - Capital & Counties (Capco), the listed specialist central London property company, was considering a demerger that would result in two separately listed businesses based around its two prime central London estates, Covent Gardens and Earl's Court. The company said yesterday that each of the businesses would have their own distinct investment prospects and it was currently expected that if a demerger was pursued, it would be formalised by the end of this year.
It said Capco’s board regularly reviews the structure of the business to ensure that it is maximising long-term value creation for shareholders and believed that separation of the two estates into independent businesses would now generate a number of benefits.
These included enhancing the strategic flexibility of the two businesses going forward and the opportunity for investors to continue to participate in both businesses, which had distinct risk and reward profiles and capital requirements, enabling each business to attract the most appropriate shareholder base to support its own strategic development.
Demolition
Capco said its board had in coming to its decision to consider a demerger taken into account the changing income profile and scale of the Covent Garden business together with the completion of the final phase of demolition at Earl's Court.
Covent Garden, a world-class destination in the heart of central London, was independently valued at more than £2.5billion (R42bn) at end-December and, if the demerger proceeded, would be launched as an independent, prime central London retail-focused real estate investment trust.
Capco’s share of property interests at Earl's Court was independently valued at £759million at end-December. Through a London development company centred around the Earl's Court masterplan, the district represents one of the most important large-scale strategic opportunity areas in central London.
Ian Hawksworth, chief executive of Capco, said the company had achieved significant growth since listing and driven value creation from its two prime central London estates, both of which had positive long-term growth prospects.
Shares in Capco rose 4.14percent on the JSE yesterday to close at R50.30.