Capital & Counties Properties Plc climbed to a record after JPMorgan Chase & Co. said the builder planning 7,500 homes at London’s Earls Court may sell part of the site and use some of the proceeds for a one-time dividend.
The shares rose as much as 4 percent to 316.80 pence, the highest since CapCo was split off from Capital Shopping Centres Group Plc in May 2010. The Earls Court project is the company’s second-biggest asset by value.
A potential sale of part of Earls Court is “in the cards,” JPMorgan analysts including Harm Meijer said in a note to investors today, which could result in a special dividend. Capital & Counties declined to comment.
Developers including Capital & Counties that own land for housing are benefitting from rising home prices in the U.K. capital, low interest rates and U.K. government incentives to make it easier for people to buy homes.
The JPMorgan analysts raised their rating on the London-based developer to “overweight” from “underweight” and raised their price estimate to 365 pence from 290 pence.
The analysts said Earls Court and Covent Garden, another of CapCo’s London sites, may appreciate significantly in the years ahead.
“Management has a punchy plan of action to maximize value from Earls Court and Covent Garden in the next three years,” they said. Covent Garden is undervalued by as much as 38 percent, while Earls Court could rise to 50 million pounds per acre from 14.8 million pounds per acre last year, the analysts said.