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Interim Management Statement for the period 1 July to 15 November 2013
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)
JSE code: CCO
ISIN: GB00B62G9D36
15 November 2013
CAPITAL & COUNTIES PROPERTIES PLC (“CAPCO”)
INTERIM MANAGEMENT STATEMENT FOR THE PERIOD 1 JULY TO 15 NOVEMBER 2013
Ian Hawksworth, Chief Executive of Capital & Counties Properties PLC, commented: “Our strategy of
creating and growing value across our estates has continued. We have signed several high quality
brands at Covent Garden and completed further residential sales. At Earls Court, a number of
milestones have been achieved for the Masterplan including the receipt of formal planning consent.”
Value growth at Covent Garden
- 14 new openings including Dior Beauty, Sandro and Sticks ‘n’ Sushi
- New lettings and renewals achieved on average 3.3 per cent above ERV at the point of lease
activity
- Further residential sales at The Russell at an average value of £2,400psf
- On track to achieve £60-65 million ERV by December 2015
Value creation through planning and land assembly for the Earls Court Masterplan
- Formal planning consent granted for the Earls Court Masterplan following signing of Section
106 agreement
- Exercise of option in relation to the Conditional Land Sale Agreement (CLSA)
- Acquisition of residual 50 per cent interest of the Empress State Building completed in
August
Progress towards delivery at Lillie Square
- Enhancements to the original scheme consented by London Borough of Hammersmith &
Fulham in August
Strong financial position
- LTV of 16 per cent and liquidity of £295 million
- New £119 million debt facility completed to finance Empress State Building
Enquiries
Capital & Counties Properties PLC
Ian Hawksworth Chief Executive +44 (0)20 3214 9188
Soumen Das Finance Director +44 (0)20 3214 9183
Public relations
UK: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA: Frederic Cornet/Cara White, College Hill Associates +27 (0)11 447 3030
Covent Garden
Value growth of the Covent Garden estate continues through the strategy of creative asset
management, tactical acquisitions and strategic development opportunities. Since 30 June 2013,
new lettings and renewals (excluding those with non-standard terms such as development breaks)
representing £2.7 million of rental income per annum have been contracted at 3.3 per cent above
ERV at the point of lease activity. The estate is on target to achieve £60-65 million of ERV by
December 2015. Occupancy as at 30 September 2013 was 99 per cent and footfall remains strong at
44 million visitors.
Retail: Covent Garden has become a destination for luxury beauty in London. In November the Dior
Beauty Boutique opened in the Market Building adjacent to the Chanel boutique. Miller Harris, a
luxury fragrance boutique, will also be taking space in the Market Building and is due to open in the
new year.
French fashion label Sandro, part of the LVMH stable, opened on King Street in September
expanding the contemporary luxury offering on the street, and a pop-up concept from British
handbag designer Lulu Guinness opened on Floral Street in October.
On Long Acre, Reebok opened its new fitness concept, the Reebok FitHub, in September, and
lululemon athletica will open its first official store in Europe in the new year replacing its current
showroom on Floral Street.
Food & dining: Copenhagen based Sticks’n’Sushi opened a new Asian fusion restaurant on Henrietta
Street in November. Pips Dish, a unique dining concept which has no menu but instead cooks
seasonal ingredients daily, has taken space on Exeter Street.
Residential: Following the launch of The Russell earlier in the year, four of the five luxury apartments
have been sold. The sales set a new level in the district with an average price of £2,400psf across the
project. The next two residential projects, The Beecham and The Southampton, are underway and
will create a further sixteen apartments, which will be launched in 2014.
The first premium residential product for lease in the estate was launched in September at 9 King
Street and is fully let, achieving a record rental in the area of £65psf.
Future Developments: The planning applications for the Carriage Hall and Kings Court developments
are expected to be heard by Westminster City Council in the coming months.
Acquisitions: 14 Henrietta Street was acquired in October, consolidating the ownership of the street.
Earls Court Masterplan
Planning: In November, formal outline planning consent for the Earls Court Masterplan was secured
following signing of the Section 106 agreement. The Mayor of London approved the outline planning
application in July, and in September the Secretary of State made the decision not to call in the
application.
It is envisaged that detailed planning applications for Earls Court Village will be submitted shortly
following a public consultation due to commence later this month.
The judicial review hearing in relation to the Supplementary Planning Document (SPD) was
successfully defended by the local authorities in October following the hearing in July. Capco
participated in the hearing as an interested party as the challenge was made against the London
Borough of Hammersmith & Fulham (LBHF) and the Royal Borough of Kensington and Chelsea. This
is the third challenge that the councils have successfully defended in relation to the Earls Court
Masterplan, however the risk of further judicial review challenges against planning decisions or land
assembly cannot be discounted.
Land Assembly: Capco has exercised its option in relation to the CLSA. This will enable LBHF and
Capco to agree a phasing strategy in relation to achieving vacant possession of the land and
subsequent draw down.
The acquisition of the 50 per cent of the Empress State Building not already owned was completed
in August following exchange of contracts in May. The building provides an income stream until 2019
whilst offering a number of options to create further value over the medium-term as the area
benefits from the implementation of the Earls Court Masterplan.
Discussions continue with Transport for London following the announcement in July of the
agreement to pursue proposals to settle heads of terms for a joint venture to enable the
development of Earls Court 1 & 2 in line with the Earls Court Masterplan.
Lillie Square
The amendments to the existing scheme were approved in August by LBHF. These enhance the
previous consent by improving the landscaping strategy across the site as well as providing more
amenity space around certain buildings within the development.
The sales and marketing programme is being finalised for the launch of pre-sales which is expected
to take place in the new year.
Venues business
The Venues business continues to perform in line with expectations. Bookings are lower than in
previous years reflecting the continuing uncertainty around the future of the Earls Court venue. At
this time, Earls Court is taking bookings for 2014.
The enhanced Olympia London venue remains the focus of the future of the Venues business. As
part of the on-going investment in improvement works to Olympia London a series of planning
applications were submitted in July which aim to reinstate and enhance the entrance to Olympia
Grand and improve Olympia Way through cycle lanes, improved surfaces and signage.
Financial position
The Group’s financial position remains strong, with a loan-to-value of 16 per cent (based on 30 June
property values) and cash and available facilities of £295 million.
30 September 2013 30 June 2013
Gross debt £414m £408m
Cash balance £93m £127m
Net debt £321m £281m
Liquidity (cash and available facilities) £295m £344m
Property loan-to-value 16% 14%
Weighted average debt maturity 4.7 years 5 years
Weighted average cost of debt 4.3% 4.3%
Proportion of gross debt with interest rate protection 100% 100%
The figures above include the new £119 million secured debt facility to finance the Empress State
Building which was completed in August, and the proceeds from the sale of the last asset within The
Great Capital Partnership which completed in September.
As at 30 September 2013, Capco had capital commitments of £42 million.
Sponsor:
Merrill Lynch South Africa (Pty) Limited
- ENDS -
This press release 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 press release 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):
Capco is one of the largest investment and development property companies that specialises in
central London real estate and is a constituent of the FTSE-250 Index. CAPCO holds 2.7 million
square feet of assets valued at £2.1 billion (as at 30 June 2013) in two landmark London estates:
Covent Garden, which has assets valued at £1.1 billion including the historic Market Building, and EC
Properties including the Empress State Building together with the Venues business amounting to
aggregate property assets of £970 million. The company is listed on the London Stock Exchange and
the JSE, Johannesburg.
“Capco” represents Capital & Counties Properties PLC and all its subsidiary companies and group
undertakings.
www.capitalandcounties.com
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