Investors plump for Capco's London property portfolio

Capital & Counties' Ian Hawksworth says its London properties are doing well and things look good for the rest of the year.

In the past year Capco's share price has risen 38% from R42.55 to R59.20.

Beyond its assets performing well‚ the company's price has also been buoyed by the flight of investors away from South African stocks‚ looking to hedge against rand weakness.

Capco‚ which owns the mixed-use estates Covent Garden and Earl's Court in central London has released a "positive" interim management report for the first five months of 2014.

Capco Chief Executive Ian Hawksworth said that Covent Garden had driven the company's solid performance so far this year.

"We have had a positive start to the year as we create and grow value across our London estates. Covent Garden thrives as a world-class destination‚ with strong leasing momentum and a number of acquisitions.

Earl's Court and Lillie Square

"The reimagination of Earl's Court is moving forward following detailed planning consents and the establishment of the joint venture with Transport for London. Lillie Square was launched successfully with more than 200 units reserved or exchanged‚ following strong demand for this premium residential development‚" he said.

He said Covent Garden was one of the most exciting retail destinations in London" which represented global luxury for the capital.

"Demand for space from brands is strong across the estate‚ and occupancy was 98% as at March this year‚" he said.

Covent Garden in London. Image: Urban 75

Leasing transactions including new leases‚ renewals and rent reviews representing £3.6m of rental income were completed at 3.6% above last December's estimated rental value.

Capco secured four new retail and restaurant lettings including the men's beachwear retailer Orlebar Brown and the Michelin-starred restaurant Lima.

There have been £46m worth of acquisitions on the estate in the year-to-date.

Turning to Earl's Court‚ Capco also established a joint venture with Transport for London (TfL)‚ the local government organisation that is responsible for most aspects of the transport system in Greater London.

Capco has a 63% interest in the joint venture with TfL.

The venture allows Capco to engage in detailed planning for changing Earl's Court Village and it also allows for the change of use‚ to residential‚ for the Empress State Building.

Capco also launched Lillie Square flats.

As many as 204 of the 237 flats or 86% in the development's first phase were reserved or exchanged in the five weeks since the launch in March.

Capco has also been trying to secure more events at the Olympia Conference Centre in Earl's Court. It said it had managed to move the Ideal Home Show and the London Book Fair to the venue.

Hawksworth said that the group's financial position was strong‚ with a loan to value ratio of 17%‚ based on last December's property values. It has cash of £425m.