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Business Update
Capital & Counties Properties PLC
(Incorporated and registered in the United Kingdom and Wales with registration Number 07145041
and registered in South Africa as an external company with Registration Number 2010/003387/10)
ISIN: GB00B62G9D36
JSE code: CCO
02 December 2019
CAPITAL & COUNTIES PROPERTIES PLC (“Capco” or “the Company”)
BUSINESS UPDATE
Following completion of the sale of Capco’s interests in Earls Court for £425 million, the Company is today
providing an update on the business:
- Sale of Capco’s interests in Earls Court completed successfully with initial net proceeds of £156
million received and £211 million to be received over the next two years
- Capco is now positioned as a prime central London property investment business and will convert
to UK REIT status before the end of 2019
- Capco’s strong balance sheet and significant financial flexibility (approximately £900 million of cash
and undrawn facilities) positions it to capitalise on further investment opportunities. Over £50 million
invested recently through targeted acquisitions at Covent Garden
- Capco will target a progressive dividend policy over the medium-term by driving rental growth and
securing income. Administration costs expected to be approximately £20 million on a run rate basis
from the end of 2020
Capco is now positioned as a prime central London property investment business centred around Covent
Garden. This is a world-class estate based in the heart of London’s West End in concentrated ownership,
which provides a differentiated offer, delivering an attractive environment for retail and restaurant brands,
office occupiers, residents and consumers. Capco’s creative approach and emphasis on the consumer
ensures the estate is well-positioned to deliver further rental growth and capture its reversionary income.
The West End offers greater insulation from the well-documented wider retail challenges however it is not
immune with certain retailers taking a more conservative view, as a result of broader political and macro-
economic uncertainty and occupational cost pressures. Nevertheless, trading performance on the estate
remains encouraging with footfall growth and average tenant sales continuing to trend upwards.
Recent signings across the estate include Big Mamma on Henrietta Street, L’Occitane in the Market
Building, Pandora on James Street, A.P.C. on Floral Street and Lulu Guinness on King Street. There has
been strong demand for office and residential space with high occupancy and rates of renewal.
Capco continues to create unique customer experiences on the estate. For the Christmas trading period,
cosmetics brands Glossier and Huda Beauty have launched pop up concepts on Floral Street and the East
Piazza, which is also hosting the Tiffany & Co. ice-skating rink.
Acquisitions
Capco’s strong balance sheet and access to substantial liquidity provides significant financial flexibility.
Over £50 million has already been invested through the acquisition of two target properties located on the
southern side of the estate, which offer significant value creation opportunities.
Capco has exchanged contracts to acquire the freehold interest of 5-6 Henrietta Street for £34 million
(before purchaser’s costs) with completion expected later this week. The multi-let building produces an
annual rental income of £1.2 million across 14,300 square feet which comprises 8,200 square feet of
restaurant space let to Din Tai Fung and four floors of office space which are currently vacant.
In addition, on 19 November 2019, Capco acquired the freehold interest of Sussex Mansions, 36-39 Maiden
Lane for £17.8 million (before purchaser’s costs). The building comprises a restaurant let to Franco Manca,
as well as office and residential space. The property generates an annual rental income of £0.6 million
across 13,300 square feet.
Further information on the sale of Earls Court
Payments will be made to Capco on a phased basis, with 45 per cent received on completion and the
balance over two years. Net proceeds from the initial payment were approximately £156 million (adjusting
for net debt, transaction-related costs and other completion items). The balance of £211 million will be
payable in two equal instalments, 12 months and 24 months after completion. The deferred payments
receivable by Capco would be accelerated in part to the extent that payments made by Capco to the
London Borough of Hammersmith and Fulham pursuant to the CLSA are refunded to the Purchaser after
completion. Refer to the announcement ‘Sale of Earls Court Interests for £425 million’ released on 15
November 2019 for further information.
Enquiries
Capital & Counties Properties PLC
Ian Hawksworth Chief Executive +44 (0)20 3214 9188
Situl Jobanputra Chief Financial Officer +44 (0)20 3214 9183
Sarah Corbett Head of Investor Relations +44 (0)20 3214 9165
Media enquiries
Sarah Hagan Director of Communications +44 (0)20 3214 9185
UK: Tulchan Jessica Reid +44 (0)20 7353 4200
UK: Hudson Sandler Michael Sandler +44 (0)20 7796 4133
SA: Instinctif Frederic Cornet +27 (0)11 447 3030
JSE Sponsor
Merrill Lynch South Africa (Pty) Limited
Notes to Editors
About Capital & Counties Properties PLC (Capco)
Capital & Counties Properties PLC is one of the largest listed property investment companies in central
London and is a constituent of the FTSE-250 Index. Capco’s landmark estate at Covent Garden was valued
at £2.6 billion (as at 30 June 2019) where its ownership comprises over 1.2 million square feet of lettable
space. The company is listed on the London Stock Exchange and the Johannesburg Stock Exchange.
www.capitalandcounties.com
Date: 02-12-2019 09:00:00
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