Capital & Counties CAPC Interim Management Statement

  Capital & Counties (CAPC) - Interim Management Statement

RNS Number : 4929Q
Capital & Counties Properties Plc
07 November 2012




7 November 2012



CAPITAL & COUNTIES PROPERTIES PLC ("CAPCO")

INTERIM MANAGEMENT STATEMENT

FOR THE PERIOD 1 JULY TO 7 NOVEMBER 2012



Ian  Hawksworth,  Chief  Executive  of  Capital  &  Counties  Properties  PLC, 
commented:



"The year to  date has been  one of further  momentum as we  continue to  make 
progress on our strategy. The Covent Garden estate is performing well with the
scope for further  value to be  unlocked through continued  investment in  the 
district, expansion of the portfolio through acquisitions and new retailer and
restaurant lettings.  Key milestones  have been  reached for  the Earls  Court 
Masterplan,  including  LBHF's   positive  planning   decision  announced   in 
September, and we look forward to  reporting further progress at the  year-end 
results."



Further expansion of Covent Garden



· ERV target for Covent Garden increased  to £60-65 million by the end  of 
2015

· £149 million  equity placing in  September 2012 to  fund further  growth 
activity in Covent Garden

· Over £60 million invested in Covent Garden during the period through new
acquisitions on Wellington Street, Floral Street and Henrietta Street



Significant milestones reached at Earls Court



· Resolution to grant consent given by LBHF for the Earls Court Masterplan
outline planning application, RBKC planning committee due 20 November 2012

· LBHF voted to enter into the Conditional Land Sale Agreement to  include 
its land in the redevelopment

· Completion of the  joint venture agreement  for Seagrave Road  releasing 
cash proceeds of £68 million to Capco



Financial position and capital recycling



· Disposal of £116 million (Capco  share) of mature assets from The  Great 
Capital Partnership

· Cash  balances  and  available  facilities of  £458  million  as  at  30 
September 2012

· Pro forma debt to assets ratio of 9 per cent





A conference call for analysts and investors is being held today at 8:30am  UK 
time.



Enquiries



Capital & Counties Properties PLC

Ian                             HawksworthChief 
Executive+44 (0)20 3214 9188

Soumen Das   Finance Director
 +44 (0)20 3214 9183



Public relations

UK: Michael Sandler/Wendy  Baker, Hudson  Sandler   +44 
(0)20 7796 4133

SA: Nicholas Williams/Morne Reinders,  College Hill Associates+27 (0)11  447 
3030





Covent Garden



Covent Garden continues  its transformation.  In September  an equity  placing 
raised £149 million of gross proceeds to invest further in the growth strategy
for the district. The ERV  target has been extended  to £60-65 million by  the 
end of 2015.



Acquisitions: Since July, over £60 million has been invested in Covent  Garden 
through new  acquisitions.  On 5  November,  the purchase  of  the  Wellington 
Portfolio for £43 million  was completed, which  includes three properties  on 
the corner of Wellington  and Tavistock Street.  The three buildings  comprise 
52,700 sq ft  of restaurant,  office and  retail space  and offer  significant 
opportunity for  asset management  and potential  redevelopment. Other  recent 
acquisitions include  the purchase  of  14 Garrick  Street  in July;  and  the 
purchase of six retail units on Henrietta Street and Floral Street in October.



Leasing activity:  Covent Garden  has  seen an  active  year with  45  leasing 
transactions representing  £6.4  million  of  rental  income  to  the  end  of 
September, with new lettings at 7.6 per  cent above ERV at the point of  lease 
activity. There were  fewer new  transactions over the  Olympics period,  with 
four new lettings signed at  0.2 per cent above ERV,  but the autumn has  been 
busier and a number of new lettings are expected to complete before  year-end. 
The EPRA adjusted occupancy rate for the estate is 99.7 per cent and  footfall 
remains consistent at 44 million on a 12 month rolling basis.



Retail: July  saw the  opening of  fashion retailer  Opening Ceremony's  first 
pop-up store in the  UK and in  October the brand  relocated to its  permanent 
home at 35 King Street.  King Street, the home  of contemporary luxury in  the 
West End, will also welcome high-end retailer Twenty8Twelve at 15 King  Street 
in 2013 and Hackett  House, the new concept  from menswear brand Hackett  will 
open at 37 King Street this  winter. Luxury retailer Chanel launched a  pop-up 
boutique in the Market  Building in July with  a bespoke fragrance and  beauty 
concept and  will be  trading  through Christmas.  Ralph Lauren  has  recently 
announced that it will  be closing its Rugby  brand globally in January  2013. 
The Rugby unit on King Street, adjacent to the Apple store and Burberry  Brit, 
is let to Ralph Lauren with the first break option in 2021.



Food & dining: Keith McNally's Balthazar and Balthazar Bakery are expected  to 
open in early 2013 and will join Jamie Oliver's new British concept with Chris
Bianco, Jamie's Union  Jacks, which  opened in the  North Hall  of the  Market 
Building in July 2012. Also new to the Market Building is premium  chocolatier 
Venchi which opened its first UK store in July serving artisan chocolates  and 
gelato.



Residential: Contracts were  exchanged for the  sale of a  second flat in  The 
Henrietta in October for  over £4 million continuing  to set a strong  pricing 
tone for the area.  Work on the second  office to residential conversion,  The 
Russell, to create five  new luxury apartments overlooking  the Piazza, is  on 
track to complete in Q1 2013. Renovation at The Beecham will start early  next 
year to create further high-quality apartments  on the upper floors and a  new 
retail or restaurant concept on the ground and lower ground floors.



Developments: Plans for  a larger scale  mixed-use development centred  around 
Kings Court  are being  considered  to drive  further  value in  the  district 
particularly around  King Street  and Floral  Street. It  is intended  that  a 
planning application for the scheme will be submitted during H1 2013.



Earls Court Masterplan



Significant progress continues on the Earls Court Masterplan to implement  Sir 
Terry Farrell's  vision for  'Four Urban  Villages and  a 21^st  Century  High 
Street' on the Earls Court & West Kensington Opportunity Area ("ECOA"). On  12 
September, the  London Borough  of Hammersmith  & Fulham  ("LBHF") approved  a 
resolution  to  grant   consent  for  the   outline  Earls  Court   Masterplan 
application. The Royal  Borough of  Kensington &  Chelsea ("RBKC")  is due  to 
consider the application  on 20  November 2012. Negotiations  continue on  the 
Section 106  agreement  which  will  deal  with  the  detailed  implementation 
requirements and  associated community  benefits of  the Masterplan,  and  the 
final documentation is expected to be completed in 2013.



Following the publication of the draft terms in April, LBHF voted in favour of
entering into the Conditional Land Sale Agreement ("CLSA") to include its land
in the  redevelopment  which includes  the  West Kensington  and  Gibbs  Green 
estates. The principal terms of the CLSA remain in line with those  previously 
indicated. The documentation is being finalised  and is expected to be  signed 
shortly.



The application  for  judicial review  that  was  received by  LBHF  and  RBKC 
regarding the  Supplementary  Planning Document  for  the ECOA  has  now  been 
granted a hearing and is expected to be heard in the High Court in 2013. Capco
has been notified as an interested party.



Discussions continue  with Transport  for London  ("TfL") on  the Earls  Court 
lease regear and TfL's land within the Earls Court Masterplan.



Seagrave Road



The joint venture  agreement with the  Kwok Family Interests  relating to  the 
Seagrave  Road  site  completed  on  30  August,  with  Capco  receiving  cash 
consideration of £68 million. Design  work continues on the implementation  of 
the detailed planning consent received in  March 2012 to create 808 new  homes 
and a new garden square, with work on site due to commence during 2013.



EC&O Venues



The EC&O Venues business continues to perform in line with expectations,  with 
57 per cent  of budgeted  business already  contracted for  2013. Earls  Court 
successfully hosted the  Olympic volleyball tournament  this summer  welcoming 
over half a million visitors into the venue over the two week period.



In October at  an industry awards  event, Olympia was  recognised with a  high 
commendation in the category of Exhibition Venue of the Year. Olympia's  Grand 
Hall welcomed the Great  British Beer Festival back  for the first time  since 
2005, securing a record 47,530 visitors during the festival.



Improvement works of £9 million to Olympia Two completed in September on  time 
and on budget. The new West Hall,  completed in December 2011, has welcomed  a 
variety of shows including Colours of Beijing.



The Great Capital Partnership & China



The strategy to  dispose of  mature assets  in The  Great Capital  Partnership 
("GCP") and recycle  capital back into  the core business  continued with  the 
sales of 100 Regent Street and Regent Arcade House in September releasing  £56 
million (Capco share). This followed the  sale of the Jermyn Street Estate  in 
July for £60 million (Capco share).



The final asset in  China has been  contracted for sale  and cash proceeds  in 
line with the June market value of  £5 million are expected to be received  by 
year-end.



Financial position



As at  30 September  2012  following the  equity  raising, completion  of  the 
Seagrave Road joint venture and sales within GCP:



· Gross debt for the  Group was £380 million  (30 June: £450 million)  and 
net debt was £139 million (30 June: £397 million)

· Based on 30 June property values, the pro forma debt to asset ratio  was 
9 per cent (30 June: 24 per cent)

· Cash balance of  £242 million and available  facilities of £216  million 
providing liquidity of £458 million (30 June: £248 million)

· Weighted average maturity of  the Group's available debt facilities  was 
4.8 years (30 June: 4.5 years)

· Average cost of drawn debt, excluding fees on undrawn amounts, was 5 per
cent (30  June: 5  per cent),  with 100  per cent  of the  debt interest  rate 
protected (30 June: 100 per cent).



As at 30 September 2012 Capco had capital commitments of £13.5 million.



                                   - ENDS -



This announcement  includes statements  that  are forward-looking  in  nature. 
Forward-looking statements involve known and unknown risks, uncertainties  and 
other factors which may cause the actual results, performance or  achievements 
of Capital  & Counties  Properties PLC  to be  materially different  from  any 
future results,  performance  or achievements  expressed  or implied  by  such 
forward-looking statements. Any information contained in this announcement  on 
the price at which shares or other securities in Capital & Counties Properties
PLC have been bought or sold  in the past, or on  the yield on such shares  or 
other securities, should not be relied upon as a guide to future performance.



About Capital & Counties Properties PLC (Capco)



CAPITAL &  COUNTIES  PROPERTIES PLC  is  one  of the  largest  companies  that 
specialises in central London real estate and is a constituent of the FTSE-250
Index. CAPITAL &  COUNTIES PROPERTIES  PLC holds  3.0 million  square feet  of 
assets valued at £1.6 billion  (as at 30 June  2012) in three landmark  London 
estates: Covent Garden, which has assets valued at £856 million, including the
historic Market Building; Earls Court &  Olympia Group and 50% of the  Empress 
State building in Earls Court amounting  to aggregate property assets of  £620 
million; and  the  Great  Capital  Partnership, a  joint  venture  with  Great 
Portland Estates, which holds prime West End properties of which Capco's share
is £159 million. The company  is listed on the  London Stock Exchange and  the 
JSE, Johannesburg.

www.capitalandcounties.com

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END


IMSBIBDBCBGBGDL -0- Nov/07/2012 07:00 GMT