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July 31, 2012 5:21 pm
The booming retail market in London’s West End helped Capital & Counties, the largest landlord in Covent Garden, post strong results for the six months to June 30.
Capco, which is also leading an £8bn scheme to redevelop Earls Court, in west London, signed 34 new leases in Covent Garden during the first half, helping lift the value of its portfolio 4.8 per cent on a like-for-like basis to £1.6bn.
Demand for shop space in the West End has soared during the past 18 months, as retailers look to cash in on the steady flow of cash-rich tourists visiting the capital. The appetite has pushed up rents across the central London retail district, forcing many traditional office occupiers to relocate elsewhere in the city.
Ian Hawksworth, Capco chief executive, said the company was eyeing a number of small acquisitions in the area to bolster its portfolio, which includes Long Acre and King Street.
“The other thing we are looking at doing is redeveloping a few larger office buildings into retail and residential property, as the demand is that much greater,” Mr Hawksworth added.
He said the company was making good progress with securing planning permission to create a 7,500-unit housing development at Earls Court – one of the largest proposed regeneration projects in London.
Capco is expecting a decision on planning after the summer.
“There is always a risk that you won’t get it, but the policy for the area is for comprehensive redevelopment and it would be unusual to see a decision where that policy wasn’t followed,” Mr Hawksworth said.
Net asset value per share rose 6.8 per cent during the six months to 177p. Total returns for the company were 7.4 per cent during the period, while the interim dividend was held flat at 0.5p.
The company also disposed of £125m of property during the six months, using the proceeds to pay down debt and invest in Covent Garden and Earls Court.
Shares in the company, which have risen 13.6 per cent since the start of the year, were flat on Tuesday at 210p.
Harm Meijer, senior property analyst at JPMorgan, said success at Earls Court had already been factored into Capco’s share price.
“The timing at Earls Court is a bit of a risk at the moment. We would have hoped a year ago to have been a bit further ahead with the planning permission today,” he said.
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