Around two-thirds of Capital and Counties’ (CAPC) property portfolio is in or around Covent Garden, and contrary to earlier fears, the new business rates have not had any effect on demand from tenants.
Robust demand at Covent Garden helped to lift the valuation by 1.5 per cent to £2.4bn, while the estimated rental value if all rents were marked to market grew by 2.8 per cent to £98.8m. The target remains to build this to £125m by 2020. A total of 43 leasing transactions were completed at an average 3.9 per cent above December 2016 estimated rental value, and occupancy was high at 97 per cent.
The picture at the 70-acre site around Earls Court was less pretty. Worries about slower transactions in central London contributed to a 2.4 per cent valuation decline to £1.1bn. At the Lillie Square site, where Capco has a 50 per cent stake, 86 apartments have been sold in phase two including just 27 in the first half. Capco has consent to build 7,500 apartments, so there is going to have to be a significant acceleration in sales at some point. On the plus side, it has applied to increase the density and build 10,000 apartments, which, if successful, would have a significant positive impact on the valuation.
Analysts at Peel Hunt are forecasting adjusted net asset value at end-December of 334p (from 339.6p in 2016).
| CAPITAL & COUNTIES PROPERTIES (CAPC) | ||||
| ORD PRICE: | 305.4p | MARKET VALUE: | £ 2.59bn | |
| TOUCH: | 305.3-305.6p | 12-MONTH HIGH: | 326p | LOW: 262p |
| DIVIDEND YIELD: | 0.5% | TRADING PROP: | nil | |
| DISCOUNT TO NAV: | 9% | |||
| INVESTMENT PROP: | £3.63bn* | NET DEBT: | 19% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (restated) | 334 | -175 | -13.2 | 0.5 |
| 2017 | 334 | 25.2 | 3.7 | 0.5 |
| % change | +0 | - | - | - |
| Ex-div: | 07 Sep | |||
| Payment: | 29 Sep | |||
| *Including joint ventures | ||||
