Capco investors look to gain exposure in prime London property

Posted On Monday, 05 May 2014 10:39 Published by
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Investors continue to pump money into JSE-and London Stock Exchange-listed Capital & Counties this year‚ as they look to gain exposure to prime London property.

Ian Hawksworth

In the past year Capco's share price has grown 38% from R42.55 to R59.20. Beyond its assets performing well‚ the company's price has also been buoyed by the flight of investors away from South African stocks‚ looking to hedge against rand weakness.

Capco‚ which owns the mixed-use estates Covent Garden and Earl's Court in central London‚ on Friday released a "positive" interim management report for the first five months of 2014.

Capco CE Ian Hawksworth said that Covent Garden had driven the company's solid performance so far this year. "We have had a positive start to the year as we create and grow value across our London estates.

"Covent Garden thrives as a world-class destination‚ with strong leasing momentum and a number of acquisitions. "The reimagination of Earl's Court is moving forward following detailed planning consents and the establishment of the joint venture with TfL (Transport for London).

Lillie Square was launched successfully with more than 200 units reserved or exchanged‚ following strong demand for this premium residential development‚" he said. He said Covent Garden was "one of the most exciting retail destinations in London"‚ which "continued to redefine global luxury for the capital".

"Demand for space from brands is strong across the estate‚ and occupancy was 98% as at March 31 2014‚" he said.

Leasing transactions including new leases‚ renewals and rent reviews representing £3.6m of rental income were completed at 3.6% above December 2013 estimated rental value.

Capco secured four new retail and restaurant lettings including the men's beachwear retailer Orlebar Brown and the Michelin-starred restaurant Lima.

There have been £46m worth of acquisitions on the estate in the year to date. Turning to Earl's Court‚ Capco also established a joint venture with TfL‚ the local government organisation that is responsible for most aspects of the transport system in Greater London.

Capco has a 63% interest in the joint venture with TfL. The venture allows Capco to engage in detailed planning for changing Earl's Court Village and it also allows for the change of use‚ to residential‚ for the Empress State Building.

Capco also launched Lillie Square flats. As many as 204 of the 237 flats or 86% in the development's first phase were reserved or exchanged in the five weeks since the launch in March.

Capco has also been trying to secure more events at the Olympia Conference Centre in Earl's Court. It said it had managed to move the Ideal Home Show and the London Book Fair to the venue.

Mr Hawksworth said that the group's financial position was strong‚ with a loan to value ratio of 17%‚ based on December 31 2013 property values‚ and a cash position of £425m.

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