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,
"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
Further expansion of Covent Garden
· ERV target for Covent Garden increased to £60-65 million by the end of
· £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
· Cash balances and available facilities of £458 million as at 30
· 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
Capital & Counties Properties PLC
Executive+44 (0)20 3214 9188
Soumen Das Finance Director
+44 (0)20 3214 9183
UK: Michael Sandler/Wendy Baker, Hudson Sandler +44
(0)20 7796 4133
SA: Nicholas Williams/Morne Reinders, College Hill Associates+27 (0)11 447
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
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
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.
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.
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
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
This information is provided by RNS
The company news service from the London Stock Exchange
IMSBIBDBCBGBGDL -0- Nov/07/2012 07:00 GMT
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