Behold, a new shopping and lifestyle landlord is in town as Capital & Counties (CapCo), which owns the iconic Covent Garden in London and Shatesfury Plc, the owner of Chinatown have merged to create a £4.9bn by asset-value company.
The all-share merger will create Shaftesbury Capital pl, which will be listed on the JSE and the London Stock Exchange.
“Today we are delighted to complete the merger, bringing together two highly complementary portfolios to create the leading central London mixed-use real estate investment trust, Shaftesbury Capital PLC. We look ahead with confidence, with an experienced and talented team, to deliver long-term economic and social value for stakeholders and contribute to the success of the West End,” CapCo CEO Ian Hawksworth said. He said that Shaftesbury Capital had an "impossible to replicate portfolio" located in some of the best-known parts of London’s West End primarily focused on Covent Garden including Seven Dials, the mOpera Quarter and Coliseum; Carnaby including Soho; and Chinatown". The portfolio was independently valued at £4.9bn as at December 31 2022, comprising more than 2.9-million square feet of lettable space across 670 predominantly freehold buildings with around 2,000 individual units. This portfolio benefited from diversified income streams with approximately 1.7-million square feet of hospitality, leisure and retail space, together with approximately 0.6 million square feet of office space and about 800 residential apartments. Shaftesbury Capital would provide a rare opportunity in the listed real estate sector to invest in a mixed-use portfolio in the heart of central London. It will also benefit from an enhanced profile in the global capital markets, a substantial free float and weighting in relevant benchmark indices. Delivering merger benefits would create a stronger operational platform of scale and efficiency, including £12m of pre-tax recurring cost synergies on an annual run-rate basis from the end of the second year post-completion, maintain a strong balance sheet with access to significant liquidity and harnessing the skillsets of both original companies. The merged entity will achieve an annualised gross income of £178m and an estimated rental value (ERV) of £227m. An ERV is effectively the estimated annual market rental value of lettable space as determined biannually by a property group's valuers. The group would have net debt of £1.5bn and a loan-to-value (LTV) of 31%. alistair@propertyflash.co.za