Capital & Counties Properties releases a solid set of interim results

Posted On Monday, 04 August 2014 18:52 Published by
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Capital & Counties Properties releases a solid set of interim results after a successful expansion into the residential market.

Ian Hawksworth

The dual-listed counter (JSE and London Stock Exchange), which was one of the JSE's best- performing rand-hedge stocks last year with a total return of more than 70%, owns two central London estates Covent Garden and Earls Court.

The latter is one of the largest tracts of land left in central London and will be turned into a massive new district including 8,000 apartments and two high-street shopping nodes. Sales of the first residential phase at Earls Court, known as Lillie Square, a stone's throw from wealthy neighbourhoods such as Chelsea, were launched in April.

Capco CE Ian Hawksworth said on Friday that 90% of the 237 standard apartments launched in phase one were sold off plan within six weeks at between £1,200 and £1,800 a square foot. In addition, half the 24 upmarket penthouses at Lillie Square brought to the market two weeks ago have been reserved at an average of £2,000 a square foot. "This sets a new price record for residential property in the Earls Court area, as existing stock would typically sell for £1,000-£1,200 per square foot.''

Mr Hawksworth said the prices fetched at Lillie Square underscored the strength of demand for middle-income housing in central London. He noted that London's housing shortage is growing at 50,000 a year but that only about 20,000 new homes are expected to be added to the market every year over the next five years.

"That should support the continued uplift in residential land values in areas like Earls Court. '' Results released on Friday show that the value of Capco's property portfolio increased 7.5% (like for like) to £2.6bn in the six months ended June. Diluted net asset value was up 9% to 272p a share over the same time. Management declared an interim dividend of 0.5p a share.

The company's strategy to attract more contemporary, luxury brands to its Covent Garden estate also continues to pay off. New tenants that have recently opened shop include contemporary menswear brand Nigel Cabourn, Parisian shoe brand Bobbies and Peruvian Michelin star restaurant Lima.

Though Capco has already run hard over the past three years, analysts say recent share price weakness has created a buying opportunity for investors with a long-term horizon. Capco closed at R58.06 on Friday, 18% down on its February high of R70.

Anton de Goede, property fund manager at Coronation Fund Managers, said Capco continued to unlock value at Earls Court and Covent Garden.

"The successful launch of phase 1 of Lillie Square at Earls Court shows there is sufficient demand for new residential units in the area at new benchmark pricing levels. In addition, the repositioning of Covent Garden as an aspirational retail destination continues successfully,'' he said.

Last modified on Monday, 04 August 2014 21:33

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