Capco says valuation of London’s Earls Court has been cut
London-focused developer Capital & Counties Properties says the valuation of its Earls Court estate has been trimmed by more than a tenth
London-focused developer Capital & Counties Properties (Capco) says the valuation of its Earls Court estate has been trimmed by more than a tenth.
UK landlords have been grappling with a surge in online shopping and a decline in consumer confidence amid Brexit uncertainties.
“A number of adjustments have been made to the component parts of the valuation, including increased developer’s margin and total development cost assumptions, as well as a more conservative view on gross development value,” Capco said.
The landlord said this came after the local government body Transport for London received an independent valuation, as of end-March, of the underlying property interests held by the Earls Court Partnership.
Based on this valuation, the implied value of Capco’s property interests in the precinct was £412m (R7.7bn), a like-for-like decrease of 10.5% compared with just three months before.
Capco's other key asset is Covent Garden.
The company owns 63% of the Earls Court Partnership.
Capco’s Covent Garden and Earls Court estates were valued at £3.3bn at the end of 2018.
Peter Clark, an investment analyst at Investec Asset Management said Capco had plans with respect to Earl’s Court. One possibility included the company being split into two separate listings, one of which would be Earl’s Court, the other Covent Garden.
“The company’s strategy to sell or demerge Earl’s Court has some obvious challenges given the current macro and geopolitical environment in the UK. Hopefully this can progress regardless, and would add that the current share price prescribes very little value to Earl’s Court in any event,” he said.
Correction: June 3 2019
A previous version of this article said Capco's results were due on 31 May. This was incorrect.