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CCO
CCO - Capital & Counties Properties PLC - Capital & Counties Properties Plc
interim management statement for the period 1 January to 15 may 2012
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 May 2012
CAPITAL & COUNTIES PROPERTIES PLC
INTERIM MANAGEMENT STATEMENT
FOR THE PERIOD 1 JANUARY TO 15 MAY 2012
Highlights:
* Three new properties acquired in Covent Garden in March and
tenant activity remains strong with several recent openings
* Progress continues on the Earls Court Masterplan with the
Supplementary Planning Document for the ECOA adopted by both RBKC
and LBHF in March
* Planning consent granted for the Seagrave Road development
following the signing of the Section 106 agreement in March
* Draft terms published in relation to the possible sale of LBHF`s
land holdings in Earls Court will go to a full Cabinet meeting in
the coming months for a decision
* New 5-year GBP70 million revolving credit facility agreed
* GBP102 million (Capco share) of sales from GCP completed at a 8.5
per cent premium to December 2011 valuation
Ian Hawksworth, Chief Executive of Capital & Counties Properties PLC,
commented:
"Capco has had an active start to the year maintaining momentum and
continuing progress against its strategy of creative rejuvenation in Covent
Garden, achieving planning milestones for the Earls Court Masterplan and
Seagrave Road as well as recycling capital back into the business. The
Queen`s Diamond Jubilee celebrations and the Olympics will place a
spotlight on London in 2012 and this should benefit the Group which is
focused on landmark locations in the capital."
A conference call for analysts and investors is being held today at 8:30am
UK time.
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: Nicholas Williams, College Hill Associates +27 (0)11 447
3030
Covent Garden
Covent Garden has seen an active start to the year with 10 new lettings in
line with the repositioning and asset management strategy for the estate.
Letting transactions, including new leases, renewals and reviews, in the
first quarter of the year represented GBP2.7 million of rental value, at
4.6 per cent above December 2011 ERV and the estate is on track to achieve
its ERV target of GBP50 million by the end of 2013. The EPRA adjusted
occupancy rate for the estate is 97.4 per cent and footfall remains
consistently strong at 44 million on a 12 month rolling basis.
April saw the opening of 7 for All Mankind on King Street which will be
trading next to Jo Malone when it opens at the end of May. Casio opened a
new concept store in the Market Building and the London Film Museum, a new
cultural space for Westminster, opened in part of the former Flower Cellars
building.
In recent months Covent Garden has become the destination for new
restaurant signings in the West End. MEATmarket, a new cult burger concept
opened in the Jubilee Hall Market in May and a strong pipeline of new
restaurants is set to open ahead of the Olympic Games. Jamie Oliver will be
opening Jamie`s Union Jacks in the North Hall of the Market Building in
July in part of the space previously occupied by Ponti`s. Following
Brasserie Bar Co`s acquisition of the Chez Gerard Group, the new Brasserie
Blanc restaurant is set to open on the East Terrace of the Market Building
in mid May.
The Tuttons restaurant operating business was sold in February, and the new
owner is currently undertaking a refurbishment of the unit on the corner of
Russell Street and the east Piazza for a June re-opening. The highly
anticipated Balthazar will be opening at the end of the year in the former
Flower Cellars building and the restaurant has also completed a lease on
the adjacent space in Russell Street to open a Balthazar Bakery.
Acquisitions comprised the purchase of three properties for GBP10.1 million
on Bedford Street and Henrietta Street in March. The Odeon cinema on
Shaftesbury Avenue was sold as part of this transaction.
The Henrietta, the first residential development undertaken by Capco in
Covent Garden was launched in February. The sale of the penthouse was
completed in April at GBP6.2 million, which reflects pricing in excess of
GBP2,500 per square foot. Interest in the final three apartments is
positive. The Russell, the second office to residential conversion in
Covent Garden, is on track to be completed in early 2013. Following
planning consent, work on One South Piazza to create a new anchor
restaurant or retail space and residential apartments will begin on site at
the end of this year.
ECOA Masterplan
Progress continues on the planning process for Sir Terry Farrell`s Earls
Court Masterplan to create `Four Urban Villages and a 21st Century High
Street` in the Earls Court and West Kensington Opportunity Area ("ECOA").
In March, following an ongoing public consultation, both the Royal Borough
of Kensington & Chelsea and the London Borough of Hammersmith and Fulham
("LBHF") adopted their preferred option of the Supplementary Planning
Document ("SPD"), which sets out a planning framework in support of
comprehensive development of the Opportunity Area.
Progress has been made on discussions with LBHF in respect of its land
within the Opportunity Area. Following a consultation undertaken by LBHF
in March, the draft terms of the Conditional Land Sale Agreement ("CLSA")
were published in April. Under the draft CLSA, Capco would be entitled to
acquire the Council`s 22 acres of land on a phased basis in the Opportunity
Area for a total cash consideration of GBP105 million, plus reprovision (as
part of a future development) of the 760 homes currently on the estates,
which reflects the prevailing residential property pricing on that part of
the Opportunity Area.
At the LBHF Cabinet meeting in April to discuss these draft terms, it was
agreed that a decision to enter into an agreement would be made at a full
Cabinet meeting in the coming months on the basis of the draft terms
outlined, subject to no major new issues emerging between the Council and
Capco. At this stage no transaction has been agreed.
Capco has been informed that the application for judicial review in respect
of the Exclusivity Agreement signed in July 2011 has been withdrawn.
In March 2012, Capco agreed with LBHF to acquire any private residential
units on the West Kensington or Gibbs Green estates in the unlikely event
that LBHF is required to purchase these properties if an owner brings
forward a valid claim under certain provisions of the Town and Country
Planning Act 1990 which relate to Statutory Blight suffered as a result of
the adoption of the SPD, up to a maximum of GBP50 million including certain
other related costs. It is intended that costs incurred would be offset
against the consideration relating to any future land purchase agreement in
respect of the LBHF land. Capco can give notice to terminate the agreement
if the CLSA is not entered into by the end of the exclusivity period in
July 2012.
Discussions continue with Transport for London ("TfL") on the lease regear
and regarding its land in the Opportunity Area.
Seagrave Road
Following the signing of the Section 106 agreement, formal planning consent
for the Seagrave Road development was granted in March, which will create
808 high-quality new homes and a new garden square for west London. The
conditional joint venture with the Kwok Family Interests is expected to
complete in mid-2012 subject to satisfaction of the remaining conditions.
Certain small sites adjacent to the Seagrave Road car park site, including
land owned by Network Rail and 1-5 Lillie Road, have been acquired. The
acquisitions complement the wider land assembly strategy and enhance
connectivity between the Seagrave Road car park and Lillie Road. Work is
expected to start on site in 2013.
EC&O Venues
The venues business has performed in line with expectations for the year to
date, with a reduction in business at Earls Court given the uncertainty
over its future as a venue. Nevertheless, shows such as Top Drawer and the
Ideal Home Show have performed well; the latter saw record visitor spend
per head this year with a 25 per cent increase on the 2011 event. 92.2 per
cent of 2012 budgeted licence fees are currently contracted. Earls Court is
also an official Olympic Games venue hosting the volleyball tournament this
summer.
Further improvement works are under way at Olympia Two and the conference
centre as part of the ongoing strategy to enhance the Olympia venue and
create more flexible space.
The Great Capital Partnership
The five properties sold to Great Portland Estates for GBP150 million, and
the GBP47 million sale of Park Crescent East, completed in April. Together
with the disposal of Old Court Place earlier in the year, these sales were
completed at an 8.5 per cent premium to the December 2011 valuation and
resulted in a cash receipt to Capco of GBP67 million net of debt paydown.
The annualised rental income of the assets that have been sold was GBP3.9
million.
The remaining portfolio continues to perform well with EPRA adjusted
occupancy of 92.3 per cent.
China
The Group continues to realise capital from its investments which is
recycled into the core business. Cash proceeds of GBP8 million have been
received during the year to date. The value of the remaining investments is
GBP13 million (based on 31 December 2011 valuations).
Financial position
As at 30 April 2012, gross debt for the Group was GBP496 million (31
December 2011 GBP553 million) and net debt was GBP383 million (31 December
2011 GBP464 million). Based on 31 December 2011 property values, the pro
forma debt to asset ratio was 25 per cent (31 December 2011 29 per cent).
A new 5-year GBP70 million revolving credit facility, secured on certain
assets at Covent Garden, was agreed with BNP Paribas and HSBC Bank plc in
April. The EC&O facility which had GBP89.5 million of debt outstanding was
repaid out of cash and available facilities in May. As at 30 April,
reflecting the new facility and pro forma adjusted for the EC&O facility
repayment:
* Cash balances and available facilities were GBP248 million (31
December 2011 GBP245 million)
* The weighted average maturity of the Group`s available debt
facilities was 4.9 years (31 December 2011: 3.6 years)
* The average cost of drawn debt, excluding fees on undrawn
amounts, was 5.1 per cent (31 December 2011: 5.8 per cent), with
100 per cent of the debt hedged to provide interest rate
protection (31 December 2011: 95 per cent).
As at 31 March 2012 Capco had capital commitments of GBP22 million.
- ENDS -
This announcement 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 announcement 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 3.3 million square feet of assets valued at
GBP1.6 billion (31 December 2011) in three landmark London estates: Covent
Garden, which has assets valued at GBP808 million, including the historic
Market Building; Earls Court & Olympia Group and 50 per cent of the Empress
State building in Earls Court amounting to aggregate property assets of
GBP574 million, and The Great Capital Partnership, a joint venture with
Great Portland Estates, which holds prime West End properties of which
Capco`s share is GBP241 million. The company is listed on the London Stock
Exchange and the JSE, Johannesburg.
www.capitalandcounties.com
Sponsor:
Merrill Lynch SA (Pty) Limited
Date: 15/05/2012 08:19:44 Produced by the JSE SENS Department.
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