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Earls Court could lift C and C

Posted On Wednesday, 04 August 2010 02:00 Published by
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The property market is keeping a keen eye on the potential rezoning and development of the prime Earls Court property site.


Property Editor

ALTHOUGH Capital & Counties Properties, which is listed in Johannesburg and London, yesterday declared a dividend of 0,5p for the first six months of this year, it is the potential rezoning and development of the prime Earls Court property site which the market is keeping a keen eye on.

CEO Ian Hawksworth said yesterday that the rezoning and development of the Earls Court site was a unique opportunity to transform a district of central London. The company, which demerged from Liberty International in May, was also working alongside other stakeholders on plans to revamp Earls Court.

Mr Hawksworth said the company was working on a redevelopment plan that should be ready by October and was looking forward to the mayor of London’s master plan for the city, which he hoped would consider the company’s plans for Earls Court.

Mr Hawksworth said there was continued appetite for central London investment properties from both domestic and foreign investors.

A Catalyst Fund Managers analyst for Europe and the UK, Jamie Boyes, said the trigger in the share price of Capital & Counties could “potentially” come from the rezoning and development of the Earls Court site, which, if achieved, would add significant value to the company.

He said management was aiming to submit the planning application by the middle of next year and to get planning approval by August 2012.

Capital & Counties remained confident that its target dividend of 1,5p for the year would be achieved as a result of expected growth in rentals.

The specialist central London property company, with about a 40% South African shareholding, showed an increase in its portfolio valuation of 5,6%, which was largely in line with the average across the UK and has been driven mainly by yield compression.

This valuation increase resulted in the company, which is 14,8% owned by Liberty International founder Donald Gordon and his family, seeing an increase in net asset value of 8,7% to 138p per share.

But net rental income was down about 5% from the first six months of last year, mainly due to a fall at Earls Court and Olympia. Management was happy, however, with the performance of the exhibition business at Earls Court and Olympia during the first six months of the year.

Mr Hawksworth said there were signs of rental growth, although this was coupled with yield compression.

He said the company was well placed to make the most of the potential of its prime investment properties in strategic locations across London.

“The strength and potential of the UK’s capital city has been illustrated by the valuation growth and recurrent income in the company’s prime West End properties over the first half of this year,” Mr Hawksworth said.

Mr Boyes said the type of business conducted by Earls Court and Olympia was generally worse affected than other rental streams when the economy was slow.

He said that at a 1,3% dividend yield, Capital & Counties did not look “very attractive” when compared with its UK peers.

Source: Business Day

Publisher: I-Net Bridge
Source: I-Net Bridge
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