It’s been a good six months for Capital and Counties, the investment and development company involved in one way or another with many of Central London’s prime commercial property stocks.
The UK company, otherwise known as CapCo, has posted positive results for the period to June 2011, a period that’s been labelled ‘a successful and active first half’ of the year by its chief executive, Ian Hawksworth. He sees CapCo as ‘well positioned in the Central London property market, particularly in the retail and residential sectors’.
Pre-tax profit was £70.2m, a 28% jump from last year’s £54.8m, so you can’t really argue with that statement. There was a 2.9% like-for-like rise in the value of its commercial property portfolio, now said to edge £1.5bn. This is concentrated in three areas: Covent Garden, where occupancy rates are up 0.3% from last year to 97.4%, Earls Court, and the iconic areas around Piccadilly Circus and Regent Street, a joint venture with property managers Great Portland Estates.
In July, £79.1m of residential and commercial property was sold, in a move seen by the chief executive as consistent with an ‘ongoing approach of recycling capital from mature assets’. This strategy is designed to fit in with CapCo’s forecasts for the future: low interest rates, limited commercial property availability, and an economic upturn.
‘Considerable scope for growth’ in Covent Garden rents is foreseen, where income is reported as £390 per sq ft for average Zone A commercial property, compared to £640 per sq ft for other prime London locations. Consequently, estimated rental value has been revised upwards from £40m to £50m.
Further commercial property movement is expected around the Earl’s Court and West Kensington Opportunity Area. Planning applications have been submitted to Hammersmith and Fulham Council for an extensive regeneration project, valued at £8bn. CapCo and the council have already signed an agreement, valid for one year, granting exclusivity to both parties in discussions concerning the land.
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