Capco defers interim dividend as London property values slump
CAPE TOWN – Capital & Counties Properties (Capco), which owns assets in central London and the West End, said on Wednesday that its property values fell 16.3 percent to £2.3 billion (R52.83bn) in the six months to June 30 compared with the end of 2019, and it deferred the interim dividend.
Central and West End London properties were once among the most expensive in the world, but structural changes to retail, political uncertainty from Brexit and the Covid-19 pandemic have seen their values decline.
Chief executive Ian Hawksworth said, however, that management remained confident of the long-term prospects for central London, in particular the West End.
Covent Garden Estate in the West End, the group’s primary asset, had collected 71 percent of rent in the six months to end-June, from 99 percent in the year-earlier period.
“Covent Garden is a major central London destination offering a pedestrianised open-air environment. Our strong financial position has enabled us to take early action to support our customers, and take advantage of opportunities,” Hawksworth said.
Capco was focusing on helping customers reopen after lockdown. Most of its retail and hospitality customers had reopened, with “encouraging early indicators,” he said.
Equity attributable to owners of the parent fell by 25 percent to £2bn compared with £2.5bn on December 31, 2019.
European public real estate net tangible asset declined 18 percent to 241 pence over 293p at December 31, 2019. The dividend was deferred until the end of the year end.
Covent Garden’s property value fell 17 percent to £2.2bn. Net rental income fell 41 percent to £18m against June 2019.
There had been a strong leasing pipeline before the impact of Covid-19. Approximately 22 new leases and renewals were agreed. High-quality brands such as Vashi and Neuhaus were attracted.
More streets around the Piazza had been pedestrianised.
In terms of tenant activity, a Ganni flagship had opened on Floral Street, the American Vintage fit-out was under way, the Peloton European flagship studio fit-out continued and expansion of Bucherer’s was under way.
A 26.3 percent stake in Shaftesbury, a mixed-use real estate portfolio acquired in line with strategy to invest in opportunities near Covent Garden was acquired for £436m
Loan-to-value remained low at 32 percent (16 percent). Undrawn facilities and cash of £616m (£895m) were healthy in the uncertain environment. About £90m of deferred consideration from the Earls Court sale was received in March, with a further £105m expected to be received later this year and £15m due next year.
The Lillie Square property valuation fell by 5 percent to £138m. Completion of Phase 2 continued to progress with 66 units handed over in the first half.
Capco’s share price fell 7.76 percent to close at R29.14 on the JSE on Wednesday.