Capital & Counties (Capco), the owner of London’s coveted shopping and entertainment area, Covent Garden is on track to merge with Shaftesbury the owner of circa 670 buildings in Carnaby, Seven Dials and Chinatown by 2023.
Capco’s CEO Ian Hawksworth said on Tuesday, following the release of results for the six months to end-June 2022, that the merger was being finalised at a strong time for Capco. Hawksworth said Capco was emerging with fervour, from the brunt of the pandemic.
“There has strong operational progress at Covent Garden with high occupancy levels and excellent demand across all uses,” he said.
Leasing activity for the first half of 2022 was 9% ahead of the 2021 year, which resulted in a 5% valuation uplift. Capco stood out as one of the most lauded and reliable landlords in the UK, according to Hawksworth.
“The progress reflects the continued attraction of London’s West End to domestic and a growing number of international visitors, with customers sales in aggregate ahead of 2019. While the broader macroeconomic and political outlook remains uncertain, Capco is very well positioned with a strong balance sheet, low leverage and high liquidity,” said Hawksworth.
Key financial measures also included that Capco had equity of £1.8bn, a low group next debt to gross assets ratio of 25%, compared with 24% at the end of December 2021 and that group had been able to deliver underlying earnings of 0.5 pence per share in the six months to end-June 2022 compared with nil pence per share in the six month period to end-June 2021. Capco proposed an interim dividend of 0.8 pence per share in the reporting period compared with 0.5 pence per share in the six months to end-June 2021.
Capco was therefore in an attractive position form which it could merge with Shaftesbury, Hawksworth explained.
A combined Capco and Shaftesbury would be a R64bn, highly liquid property fund which South African and British investors are crying out for amid a low growth, high inflationary global environment.