SHC Shaftesbury Capital Plc

TIDMCAPC

RNS Number : 2409V

Capital & Counties Properties Plc

02 December 2019

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 GBP425 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 GBP156 million received and GBP211 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 GBP900 million of cash and undrawn facilities) positions it to capitalise on further investment opportunities. Over GBP50 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 GBP20 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 GBP50 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 GBP34 million (before purchaser's costs) with completion expected later this week. The multi-let building produces an annual rental income of GBP1.2 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 GBP17.8 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 GBP0.6 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 GBP156 million (adjusting for net debt, transaction-related costs and other completion items). The balance of GBP211 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 GBP425 million' released on 15 November 2019 for further information.

Enquiries

Capital & Counties Properties PLC

 
                                                   +44 (0)20 3214 
 Ian Hawksworth      Chief Executive                9188 
                                                   +44 (0)20 3214 
 Situl Jobanputra    Chief Financial Officer        9183 
                                                   +44 (0)20 3214 
 Sarah Corbett       Head of Investor Relations     9165 
 

Media enquiries

 
                                                     +44 (0)20 3214 
 Sarah Hagan           Director of Communications     9185 
                                                     +44 (0)20 7353 
 UK: Tulchan           Jessica Reid                   4200 
                                                     +44 (0)20 7796 
 UK: Hudson Sandler    Michael Sandler                4133 
 SA: Instinctif        Frederic Cornet               +27 (0)11 447 3030 
 

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 GBP2.6 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

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